Mortgage markets were mostly unchanged last week despite a series of positive developments. In addition to Greece successfully reaching a deal with its private creditors, the U.S. economy turned out strong reports — most notably with respect to Non-Farm Payrolls.
In February, the U.S. economy added 227,000 new net jobs and the figures from December and January were revised higher by an additional 61,000. It marked the 16th straight month of job gains nationwide.
The Unemployment Rate held unchanged at 8.3%.
Conforming mortgage rates in California improved slightly last week and mortgage rates continue to hover near all-time lows.
According to Freddie Mac, the average 30-year fixed rate mortgage nationwide is now 3.88% for Sacramento mortgage applicants willing to pay 0.8 discount points and a full set of closing costs.
1 discount is equal to 1 percent of your loan size.
Freddie Mac also reported the 15-year fixed rate mortgage at its lowest level in history. The average 15-year fixed rate mortgage fell to 3.13% with an accompanying 0.8 discount points. This is more a full percent lower as compared to March 2011.
This week’s big event is the Federal Open Market Committee’s second scheduled meeting of the year. Whenever the FOMC meets, mortgage rates can change in a hurry.
The FOMC is a subcommittee within the Federal Reserve, the U.S. government’s monetary-policy making group. Since 2008, the Federal Reserve has held its benchmark Fed Funds Rate near 0.000%. It’s not expected to raise that rate Tuesday. However, just because the Fed Funds Rate won’t change, that doesn’t mean mortgage rates won’t.
This is because the Fed doesn’t set mortgage rates, but it does influence them. Market will read the Fed’s post-FOMC press release Tuesday for hints of new policy or economic growth. If the statement shows more optimism for the economy than expected, mortgage rates are expected to rise.
Conversely, if the Fed shows pessimism for the U.S. economy, rates are expected to fall.
Other economic events this week include the releases of Retail Sales, Producer Price Index, and Consumer Price Index; plus three high-profile treasury auctions.
Mortgage rates remain low but may not stay that way. If you’re looking for the best rates of the year, this week may be your chance.