Average 30-year fixed rate
Week of 05/19 -0.05%
Week of 05/12 ±0.00%
Dow: 20,962 -150
NASDAQ: 6,219 -25
Growing political uncertainty was good for mortgage rates last week. Recent economic data had little impact. Mortgage rates ended the week near the best levels since before the November Presidential election.
Following the election of Donald Trump, the stock market rallied and mortgage rates rose. They did so based on pro-growth policy changes planned by President Trump. Last Wednesday, allegations of Trump’s interference in an FBI investigation gave investors reason to question the President’s ability to implement these changes. Investors reacted to the resulting political uncertainty by selling stocks and buying bonds, including mortgage-backed securities (MBS). This added demand for MBS was good for mortgage rates.
Last Tuesday’s report on housing starts contained mixed news. Housing starts in April declined 3% from March, which was well below the expected levels. However, this was due to weakness in the volatile multi-family segment. Single-family housing starts increased slightly in April. Also, the NAHB housing index showed that home builder confidence surprised to the upside in May and remains at very high levels.
THE WEEK AHEAD
This week, political news may continue to influence mortgage rates. Beyond that, New Home Sales will be released on Tuesday and Existing Home Sales on Wednesday. The second estimate of first quarter GDP and Durable Orders will come out Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.
MON 05/22 TUE 05/23 WED 05/24 THURS 05/25 FRI 05/26
Existing Home Sales GDP
The market commentary material provided is from a third party vendor, MBSQuoteline, and is not necessarily the opinions of the sender or the organization they represent. This information is intended for educational purposes only and should not be construed as investment and/or mortgage advice. Additionally, the material is deemed to be accurate and reliable, but there is no guarantee it is without error.
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