Interest Rate Predictions for This Week

Last week was the worst week for mortgage rates since late-2009. The inflation data didn’t help, but the Federal Reserve moved the news twice last week.

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. This week’s calendar is littered with influential reports all week including:

1. Case-Shiller Home Price Index
2. New Home Sales
3. FHFA Home Price Index
4. Existing Home Sales
5. Consumer Confidence
6. Initial Jobless Claims
7. 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.