Conventional and FHA Mortgage Rates on a Roller Coaster: The Week of October 31, 2011

Conventional and FHA Mortgage Rates on a Roller Coaster: The Week of October 31, 2011

Mortgage markets moved across a wide range last week before, ultimately, finishing unchanged. The bailout of Greece both dominated headlines and dictated market direction.

Rates Are On a Roller Coaster Ride

It was a wild ride for rate shoppers.

Early in the week, Conforming and FHA mortgage rates spiked. Eurozone leaders expressed optimism that a deal for Greece’s solvency would be made, rhetoric to which Wall Street responded selling mortgage bonds.

When markets closed Wednesday, conforming mortgage rates in California were at their highest levels since September.

However, when markets opened Thursday, rates began to reverse lower. Investors deemed the details of the Greece fuzzy, and, once again, sought safety in the U.S. mortgage bond market (thus lowering interest rates when monies move out of the equity markets and into the bond market).

As such, rates fell through Friday afternoon, closing the week precisely where they started.

The Week Ahead

This week’s market action figures to be similarly busy. In addition to Friday’s release of the October Non-Farm Payrolls data, the Federal Open Market Committee starts a 2-day meeting Tuesday.

It’s the FOMC’s 7th scheduled meeting of the year.

The FOMC is the Federal Reserve’s monetary policy-setting group. It does not set mortgage rates for citizens of Pleasanton , but it can exert an influence. For example, if the FOMC votes to increase the size of its Operation Twist, mortgage rates may respond favorably, causing rates to fall.

Conversely, if the FOMC scales back the size of its program because of inflationary concerns or otherwise, mortgage rates should rise.

The Federal Open Market Committee meeting ends at 2:15 PM ET Wednesday and mortgage rates are typically volatile in the hours surrounding the group’s adjournment. If you’re floating a mortgage rate or deciding whether to lock, keep this date and time in mind.

I Love to Help My Readers

I love to work with readers that find my information on the Mortgage and Housing Market helpful in your decision making process. As a Mortgage Planner at Vintage Mortgage Group in Pleasanton I am in a unique position to help you capitalize at any point in the market. Contact me below today to help you with your purchase or refinance.

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