Mortgage rates went on a bit of a roller coaster ride last week. As expected, rates begin the week on an upward trend, but by Friday, rates moved back downward. The LEI came in slightly better than expected, while New and Existing Home Sales posted declines as anticipated. Existing home inventories continue to tighten, making it difficult for total sales to rise. GDP data painted a slightly bleaker picture than experts had predicted, posting only a 1.9% increase. This leaves GDP for 2016 at 1.6%, which remains below what many experts consider the economy’s “natural potential.”
This week could very easily be another wild week for mortgage rates. In addition to the Fed meeting, Consumer Confidence, employment data, both ISM indices, and many other indicators are due. No change to interest rates is expected from the Fed, but changes to the policy and after meeting comments could move rates significantly. If all economic data comes in strong and the Fed states that it sees the economy needing less support, mortgage rates will have a tough time not climbing upward.