Mortgage Rate Predictions for This Week
The Federal Open Market Committee has its first meeting of 2010 this week. They will, on Wednesday, influence the market with two items:
- Fed Funds Target Rate: No Change Expected
- Press Release and Policy Statement: This will move mortgage rates.
The Policy Statements that follow these meetings are among the strongest predictors of mortgage rates.
When looking at mortgage rate predictions, you need to take them all with a grain of salt. It’s nearly impossible to identify exactly what mortgage rates will do, but it’s critical to know what will be driving them. This week, it is 100% about the Policy Statement or press release. Should the Fed be seeing the economy as generally improving and recovering, mortgage rates will likely jump higher. Should the Fed reference risks or lingering concerns too many times, interest rates could possibly dip.
Today’s Existing Home Sales report came in very soft, but so far the market has shrugged it off. We see New Home Sales and Case-Shiller results this week as well, but it looks like all eyes are on the Fed’s statement Wednesday.
The only certainty for this week’s mortgage rate predictions is that it will be volatile. We’ll update the current mortgage rates on Wednesday afternoon after the news breaks. This should be a very interesting meeting as the Fed gives us the first opportunity in 2010 to see what they are thinking.
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