|Forecast for the Week After last week’s holiday-shortened week, there will be plenty of economic reports to watch for.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.
When you see these Bond prices moving higher, it means home loan rates are improving – and when they are moving lower, home loan rates are getting worse.
To go one step further – a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.
As you can see in the chart below, roller coaster trading in the markets continues. I’ll continue to monitor this situation closely.
Chart: Fannie Mae 3.5% Mortgage Bond (Friday Feb 24, 2012)
The Mortgage Market Guide View
Economic Calendar for the Week of February 27 – March 02
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