Many feared uncertainty over the debt ceiling dysfunction would drive mortgage rates higher. What actually happened was mortgages got cheaper by almost .25% as jittery investors sought safe haven in bond markets until the debt ceiling issue was resolved.
Also helping rates: An armload of less than stellar economic data, including especially a weak GDP, showing economic growth is stuck somewhere between non-existent and anemic.
There seems to be a debt deal, and it will take a day or so for the markets to digest the finer points, but at first glance it seems to be a quintessential Washington deal that does not fundamentally ‘fix” anything but provides political cover and avoids making any tough decisions until after the 2012 election.
Focus should shift back towards this week’s economic data – if data points toward economic strength, mortgage rates generally rise. If further weakness is exposed, we could find ourselves testing 2011 interest rate lows.
Update: 9:00AM CDT ISM Index released. A measure of the services, construction, and financial sectors, experts expected improvement here, but it showed effectively zero expansion, is lower than June and will be taken as a setback. Bond markets, and presumably mortgage rates, are already trying to improve on this news.
This Week’s Economic Calendar [Econoday]
- Weekly Mortgage Market Commentary: Monday, November 21st 2011
- Monday Market Commentary: Mortgage Rates This Week
- Monday Market Commentary: This Week In Mortgage rates
- Monday Market Commentary: On the Menu This Week in Mortgage Rates
- Monday Market Commentary: Mortgage Rates This Week [March 14th 2011]