Last week's market experienced an uneasy calm in mortgage rate adjustments.  There was plenty of daily movement, allowing for pricing rates to fluctuate as much as .5%, but never experienced pricing adjustments and were cancelled by the end of daily trading.

This week is a BIG ONE for interest rates.  The economic calender is full of data.  April's unemployment report will be released, however this will not be the focus as the forecaster's  do not believe that the report will tell the true tale of job creation.  The main focus will be on the FMOC meeting that concludes on Wednesday.  We are eager to see how the Fed treats the present economy, which is slowly showing signs of slowing, increasing the concerns of deflation.

At the moment, the Fed is failing on both sides of its stated goals:  employment is not moving after years of printing money and lowered rates and recent inflation targets are not being met.

Ever since the Fed began its QE's, there has been a fear that it would result in inflation.  Gold and commodities have increased substantially and the bond and mortgage markets benefited due to the decline in rates.

The global economy is slowing and the major countries are feeling the results.  Declining prices are good for the consumer, but the danger lies in the possibility of consumers holding off on spending; in anticipation of prices dropping even more.  This has resulted in companies postponing investments and hiring, eluding to an even lower outlook.

According to the AP, "The number of signed contracts to buy homes rose in March to the highest level in three years.  Sales are believed to actually being held back by a limited market supply.  There continues to be proof around every corner that the housing market is well on its way to recovery, helped along by the current low interest rates".

THIS WEEK'S OUTLOOK:
There is a lot of economic news due, meaning that volatility is for certain.  Improvement may be found, but be ready to lock if the market swings in the opposite direction.  While interest rates have remained stable, we are still seeing an increase in market swings due to the constant movement of MBS's, impacting how much the consumer will pay in closing costs when locking a loan.

ADVISE:
Keep in constant contact with you Mortgage Originator to insure that you capitalize on any gains and avoid any market pitfalls.

- Michael Corboy