Mortgage Rate Predictions for This Week

Home loan mortgage rates jumped the most that we’ve seen since last December. It was a rough week dominated by the Federal Reserve and some hotter-than-expected inflation data.

We saw the FOMC minutes move the market mid-week as the Fed expressed continued economic optimism. Separately, they made a surprise change to the discount rate increasing it to 0.75% from 0.50%

Interest Rate Forecasts for This Week

If last week wasn’t enough for you, Fed Chairman Bernanke is back before Congress Wednesday and Thursday of this week. We will also see another whopping set of Treasury auctions of almost $120B. On top of all of this, the news calendar is loaded with reports all week. We have economic data coming that will give us an indication of how the housing market is doing and give us an idea of how consumers are responding to the economy as well.

Home Data

1. Case-Shiller Home Price Index
2. New Home Sales
3. FHFA Home Price Index
4. Existing Home Sales

Consumer Data

1. Consumer Confidence
2. Initial Jobless Claims
3. Personal Consumption Expenditures

Mortgage rates are at a crossroads where they might tick ever so slightly lower, but they’ll eventually move much higher. In order to get the best rate on your home loan approval, it is best to start soon.

There is very little to suggest that rates are going lower and there is a lot to suggest that rates are going higher. When they do, it is very unlikely that we’ll see rates this low again anytime soon.

The economy is definitely improving and there is no need for the Fed to continue to spend so much money to keep rates this low.

If you want to check back on this week’s mortgage rate predictions, it should be an interesting week.  Expect changes to Chicago mortgage rates with a significantly better chance of higher rates rather than lower rates.