What’s Ahead For Mortgage Rates This Week: March 11th, 2013
Mortgage rates and the major stock market indices rose last week in response to a strong jobs report and lower national unemployment rate.
The Department of Labor’s Non-farm Payrolls report for February surpassed expectations with 236,000 new jobs reported against expectations of 170,000 new jobs expected by Wall Street.
This stronger than expected showing in jobs numbers points to a stronger economy and may lead to less pressure to hold mortgage interest rates lower.
The Dow Jones Index also reached record levels last week. This strong stock market performance is to be expected with better than expected employment reports.
February’s numbers also exceeded January’s reading of 157,000 new jobs added to the economy.
Lower Unemployment Rates Help Economy, May Push Interest Rates Higher
The Unemployment Report for February also provided good news as February’s reading dropped to 7.7 percent from January’s unemployment rate of 7.9 percent.
While good news, it’s important to bear in mind that the Fed has established and unemployment rate of 6.5 percent as a benchmark for ceasing its monetary stimulus program.
The Federal Reserve released its Beige Book Report for March on Wednesday, and summarized reports from its 12 districts by noting modest to moderate economic improvement in 10 districts and slower economic growth in 2 districts.
Residential real estate markets are improving in most districts with home prices rising and inventories of available homes shrinking.
This news, coupled with last week’s rising mortgage rates is further emphasizes the upward trend in home prices in many areas and the rising cost of financing or refinancing a home.
While rising home prices are good for the economy, they impact affordability of homes, particularly for first-time home buyers.
Busy Upcoming Week In Financial News
Next week has a busy calendar of scheduled economic news; here are a few highlights:
- Tuesday, Wednesday and Thursday: Treasury Auctions
- Wednesday: Retail Sales, and Retail Sales without Auto Sales
- Thursday: Producers Price Index (PPI) and Core PPI (PPI without volatile food and energy sectors)
- Thursday: Weekly Jobless Claims, Consumer Price Index (CPI) and Core CPI (without food and energy sectors)
- Friday: Consumer Sentiment
It will be interesting to see how or if Consumer Sentiment reacts to recent signs supporting progress toward economic recovery.
If you’ve been watching interest rates to see when the best time is to lock in, this may be a good opportunity.
As the economy continues to improve, mortgage interest rates will continue an upward climb.