With the Fed’s recent policy announcement, and the comments of various Fed officials over the last
two weeks, many believe that the Fed will support low mortgage rates at least until we see economic
growth return in earnest. This, combined with more news last week that inflation is not a near-term
issue, helped mortgage rates ease back downward. Even with additional signs that the economy is
coming back to life, including another increase the Leading Indicators, rates still moved downward.
Short of very unexpected economic news, mortgage rates do not have far to move downward. As has
been the case for some time, the potential for a spike upward is significantly higher than the potential
for a large drop. This week holds two pieces of economic data that could move rates. Consumer
Confidence is expected to recover some, but 2nd quarter GDP is expected to be revised to -1.5%. If
we see Confidence rise significantly and GDP is revised upward, we could be watching mortgage rates
climb as we move through the week. Otherwise, rates are likely to stay relatively flat.