![Mortgage Investors Group in [Dynamic1]](../assets/images/mortgage-investors-group.svg)
Market Comment
Mortgage bond prices finished the week sharply lower which put upward pressure on rates. We started on a negative note, turned positive mid-week, and then lost more to end the week. This is the third week in a row in which rates behaved in this manner. Inflation fears dominated trading as traders positioned themselves ahead of expected Fed rate hikes in May and June. Oil prices remained volatile as OPEC indicated they would not meet production quotas set earlier. Several reports also warned of long-lasting oil price increases tied to the war in Ukraine and sanctions on Russia. The data was mixed. NAHB housing came in at 77 vs 76. Existing home sales were 5.77M vs 5.8M. Weekly jobless claims were 184K vs 180K. The Philadelphia Fed manufacturing index was 17.6 vs 21. Leading economic indicators rose 0.3% as expected. Mortgage interest rates finished the week worse by over a full discount point.
Looking Ahead
| Economic Indicator | Release Date & Time | Consensus Estimate | Analysis |
| Durable Goods Orders | Tuesday, April 26, 8:30 am, et |
Up 1.1% | Important. An indication of the demand for “big ticket” items. Weakness may lead to lower rates. |
| FHFA House Price Index | Tuesday, April 26, 10:00 am, et |
Up 1.8% | Moderately Important. A measure of single-family house prices. Weakness may lead to lower rates. |
| Consumer Confidence | Tuesday, April 26, 10:00 am, et |
106.1 | Important. An indication of consumers’ willingness to spend. Weakness may lead to lower mortgage rates. |
| New Home Sales | Tuesday, April 26, 10:00 am, et |
776K | Important. An indication of economic strength and credit demand. Weakness may lead to lower rates. |
| Q1 GDP | Thursday, April 28, 8:30 am, et |
Up 1.1% | Very important. The aggregate measure of US economic production. Weakness may lead to lower rates. |
| Personal Income and Outlays | Friday, April 29, 8:30 am, et |
Up 0.4%, Up 0.7% |
Important. A measure of consumers’ ability to spend. Weakness may lead to lower mortgage rates. |
| PCE Core Inflation | Friday, April 29, 8:30 am, et |
Up 0.3% | Important. A measure of price increases for all domestic personal consumption. Weaker figure may help rates improve. |
| Q1 Employment Cost Index | Friday, April 29, 8:30 am, et |
Up 1.2% | Very important. A measure of wage inflation. Weakness may lead to lower rates. |
Managing Risks
To make wise lock decisions everyone needs to be aware of two primary risks. Those are price and event risks. Price risk is simply where the market stands since regularly scheduled morning pricing. Event risk is the economic data that is heading our way. Most rate changes come in response to an economic release. A borrower that chooses to float in front of economic events takes a very big financial risk. Floating overnight when there is little data and positive movement since pricing is a calculated risk. Floating with losses ahead of a significant release is a gamble.
Rates are on an upward trend. Most borrowers would be wise to take advantage of current rates and then refinance in the future if rates fall.
