FHA Mortgage Rates Fall to Start the Short Week

Mortgage rates are improving today after turbulence over in the Italian political realm is sending financial market participants on a flight to safety. It’s going to be a short, busy week, so it will be interesting to see where rates go from here. Read on for more details.

Where are mortgage rates going?               

Italian politics cause FHA rates to fall

It’s chaos right now over in the “Beautiful Country” after President Sergio Mattarella rejected the euroskeptic Paolo Savona for the Economy Minister position yesterday, thus thwarting two anti-establishment parties from gaining power.

Then today, Mattarella asked former International Monetary Fund official, Carlo Cottarelli, to form a new government.

The only problem is that this new technocratic government is not likely to gain much support and could therefore trigger a snap election in the Fall.

If that were to happen, it could mean a shift in power and a referendum on Italy leaving the European Union. Obviously, this is news that global markets are following closely, sending investors near and far into the perceived safety on government bonds.

The yield on the 10-year Treasury note, which is the best market indicator of where mortgage rates are going, has fallen six basis points down to 2.87%.

That’s its lowest position since mid-April. Mortgage rates typically move in the same direction as the 10-year yield, so we’re seeing FHA mortgage rates down a little today.

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Rate/Float Recommendation     

Lock before FHA rates move back up 

FHA mortgage rates are down today, which is great news for anyone looking to lock on a purchase or refinance. It does still seem as though rates will gradually rise over the coming weeks and months so we’re recommending that borrowers take action sooner rather than later in order to avoid the risk of locking in a higher rate.

Learn what you can do to get the best interest rate possible.  

Today’s economic data:      

Fedspeak   

• St. Louis Fed President James Bullard at 12:40am

S&P Corelogic Case-Shiller HPI 

For March:

• The 20-city seasonally adjusted index rose 0.5%.
• The 20-city non-seasonally adjusted index ticked up 1.0%, putting it at 6.8%, year over year.

Consumer Confidence

Consumer confidence hit a 128.0 in May. That’s a strong reading that came in basically right in line with what analysts had expected.

Dallas Fed Mfg Survey 

Production rose ten points to 35.2 in May. The General Activity Index is now at 26.8.

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Notable events this week:     

Monday:  

• Memorial Day

Tuesday:   

• Fedspeak
• S&P Corelogic Case-Shiller HPI
• Consumer Confidence
• Dallas Fed Mfg Survey

Wednesday:         

• ADP Employment Report
• GDP
• International Trade in Goods

Thursday:     

• Jobless Claims
• Personal Income and Outlays
• Chicago PMI
• Pending Home Sales Index
• Fedspeak

Friday:          

• Employment Situation
• PMI Manufacturing Index
• ISM Mfg Index
• Construction Spending

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