Mortgage rates are notoriously difficult to predict, but they rise and fall based on various economic indicators. Here’s a look at what could move the markets this week.
On Thursday, the National Association of Realtors will release existing home sales data for March. And on Friday, the federal government will announce new home sales for March.
These two statistics are lagging indicators. They do not determine mortgage rates, but reflect the state of the housing economy – which has been characterized by record high inventories and soaring house prices.
Mortgage rates are complicated, but the 30-year fixed rate mortgage closely tracks the yield of the 10-year Treasury. Ultimately, the rates are set by the investors who ultimately buy your loan.
Most US mortgages are packaged in the form of securities and resold to investors. Your lender offers you an interest rate that secondary market investors are willing to pay.
On the horizon
While this week may be slow for news on rate developments, next week will be the subject of many headlines.
The Federal Reserve’s Open Markets Committee has a two-day meeting scheduled for April 27-28, and Fed Chairman Jerome Powell will deliver remarks to the media on April 28.
The Fed does not set mortgage rates directly, but rates are influenced by the general interest rate climate.
And on April 29, the US Bureau of Economic Analysis will release its estimate of first quarter gross domestic product.