Mortgage Rates May Rise Again This Week, Experts Say

Across the nation, mortgage rates ended last week slightly higher than where they began, thanks in part to the Federal Open Market Committee (FOMC) meeting minutes that were released to the media.

As for this week, the Originator Times reports that both the Producer and Consumer Indixes are due out the first part of the week, with the topper being the Philadelphia Fed Index to be released on Thursday.

So will this week be a repeat of last, or will the inflation “heat” we saw cranked up a week ago be turned down?

The release of the FOMC meeting minutes was quite the read. Richmond Fed President Jeffrey Lacker was not the only dissenter — just the only one with a vote. After all, the Federal Open Market Committee (FOMC) is comprised of voting and non-voting members.

The voting members are comprised of some permanent seats (like the Federal Reserve Chairman) and rotating seats from the various federal reserve banks.

However, any member, even non-voting members, can voice their opinion and after reading the FOMC meeting minutes, it is apparent that other FOMC members are still concerned with inflation.

It was this report that set the stage for mortgage loan borrowing costs to move higher last week.

This week, as we said, both the Producer and Consumer Price Index (CPI) are scheduled to be released. If one or both of these reports shows clear signs of inflation, it is likely that we will see home mortgage rates will move higher once again.

Additionally, the week will end with the release of the Philadelphia Fed Index which measures expansion at the manufacturing level. This too will be watched to see if manufacturing is beginning to reheat.

The bottom line: If the economic reports hint of inflation, it is likely investors will begin to head for the doors and home loan rates will rise once again.

Mortgage Foundation Prediction: A gain of .04 percent.