Focus is on Greece

Worries about Greece had the greatest impact on mortgage rates over the past week. The Fed statement and the U.S. economic data caused some volatility, but had little net effect. Mortgage rates ended lower.

A lack of progress in the negotiations between Greece and its creditors has raised concerns for investors. Neither side has indicated much willingness to compromise over required reforms. Without a bailout, Greece likely will default on debt payments due on June 30. The response of investors to the uncertainty about the global impact of a default has been to shift to safer assets such as German and U.S. government bonds, including mortgage-backed securities, helping mortgage rates improve.

There were no major surprises in Wednesday's Fed statement or Fed Chair Yellen's press conference. The guidance for the timing of the first federal funds rate hike remained unchanged and will depend on the future performance of the economy. The consensus now is that continued improvement in the economy will justify a rate hike in September.

Looking ahead, investors will remain focused on the situation in Greece. An emergency meeting between Greek officials and the creditors has been scheduled for Monday. In the U.S., Existing Home Sales and New Home Sales will come out early in the week. Durable Orders, an important indicator of economic activity, will be released on Tuesday. The Core PCE price index, the Fed's preferred inflation indicator, is scheduled for Thursday. In addition, there will be Treasury auctions on Tuesday,Wednesday, and Thursday.