Mortgage rates soared again Monday, tacking on a half-percent in a day for the second time in under a week.Each half-percent adds $62 to a $200,000 home loan’s monthly payment, or $744 per year.

For home buyers recently under contract, it’s a gut-wrenching time to be shopping for a home loan.  Morning mortgage rates have been typically gone by early-afternoon and — in some cases — lenders have changed rates five times in one-day span.

The reasons for surge in rates are varied, but each is related to the idea that the economic recession may be nearing its end.

• Consumer optimism is as high as it’s been all year
• Consumer spending is falling at a slower pace than in months prior
• China’s factories reported an expansion in business

Each of these points bodes well for the economy and pushes Wall Street investors towards more risky investments.  As a result, “safe” investments get sold — including mortgage-backed bonds, the basis for conforming mortgage rates.

For as long as the future of the economy remains in question, expect mortgage rates to remain volatile.  We won’t get half-point rate swings or five pricings in a day every day, but both are becoming more common.

Be careful when shopping for a mortgage — the rate you’re quoted may not last long.

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Mortgage markets took a beating last week, sending conforming mortgage rates soaring Wednesday afternoon.  Despite a modest recovery Thursday and Friday, though, mortgage rates still moved higher on the week overall.It was the fourth time in 5 weeks that mortgage rates worsened.

By far, the biggest news of last week was Wednesday’s mortgage market meltdown.

Beginning shortly after 1:00 PM ET, and in the span of about 90 minutes, the 30-year fixed mortgage rate soared.  The action was so swift that a number of mortgage lenders shut down their Lock Desks, unwilling to accept new business.

There was no “news”-like reason for the action, by the way — just a general feeling on Wall Street that the U.S. government’s massive debt load may lead to inflation sometime in the future.   As inflationary fears rise, mortgage rates often rise with them and this is what we witnessed happened Wednesday.

Markets regained their cool Thursday and Friday, but could only erase half of Wednesday’s surge.

This week, look for data to determine whether mortgage rates rise or fall.  Monday and Friday will be the biggest days.

On Monday, in addition to releasing consumer spending data from May, the government publishes the Federal Reserve’s preferred inflation gauge.  If either number comes in hotter-than-expected, mortgage rates should rise.

Similarly, if Friday’s employment data is better-than-expected, rates should rise, too.  More working Americans means more consumer spending and spending makes up two-thirds of the economy.

Markets expect that another 550,000 workers lost their jobs last month, raising the 12-month total to 5.65 million.

Between Monday and Friday, a number of Federal Reserve members will be speaking publicly, including Fed Chairman Ben Bernanke.  Each speaker’s statements, of course, can influence mortgage rates as well.

Overall, markets remain volatile and mortgage rates are jumpy.  If you find a rate that fits your budget and with which you can be comfortable, consider locking it in before the news gives the rate reason to change.

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