Nicole's Week in Review

Mortgage rates suffered some volatility mid-week, but ended Friday about where they opened on last Monday. The same cannot be said about today, as rates opened about .125% higher than where they ended on Friday.

Last week showed the market is absorbing much of its housing inventory, which dropped to a 7.8 month supply, down from 10.1 months in April. This is in part due to builders' caution in beginning new developments -- Housing Starts and Building Permits came in below expectations last week. On the other hand, Existing Home Sales came in better than expected, with nearly 45% of homes sold to first-time home buyers!

PPI fell, however next month it could be higher as oil and natural gas prices have soured lately. Remember, high oil prices are not good for mortgage rates, and could send them higher.

Forecast for the Week

The Treasury Department will auction off nearly $123B in debt this week, which could cause some major volatility in mortgage rates this week, so hold on to your hats.

Other potential market movers this week are Wednesday's New Homes Sales, and Thursday's Initial Jobless Claims Report and GDP report. Lastly is another read on inflation with Friday's Core Personal Consumption Expenditure (PCE) Index.

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