Mortgage Market Update, November 26, 2013

For those who follow mortgage markets closely, last week was fascinating. The week started a bit slow because of Veteran’s Day meaning a slightly abbreviated week. However, when the hearings started for Janet Yellen to be the next Fed Chairman, the markets became worth watching! In fact, on Wednesday and Thursday, the bond markets rallied

Mortgage Market Update, November 26, 2013

For those who follow mortgage markets closely, last week was fascinating. The week started a bit slow because of Veteran’s Day meaning a slightly abbreviated week. However, when the hearings started for Janet Yellen to be the next Fed Chairman, the markets became worth watching! In fact, on Wednesday and Thursday, the bond markets rallied keeping rates at lows that we’ve come to expect in mortgages.

What’s happening at the Fed

Currently, Ben Bernake is scheduled to complete his term at the Federal Reserve in January. Congress is currently questioning the current Vice Chair, Ms. Yellen to replace him. Ms. Yellen is widely believed to be a fiscal “dove” when it comes to monetary policy and is generally expected to pass through the confirmation hearings without much opposition. Most market experts expect that Ms. Yellen will begin the tapering of the current QE program shortly after being sworn in as the next chair of the Fed. In fact, many believe had it not been for the government shutdown that this tapering would have already begun.

What is happening in the markets?

Generally speaking, the mortgage markets have been fairly stable for the last month or more. Rates are holding steady and there has not been a lot of news that has had a serious impact on rates. One of the more notable pieces of news came out on November 18 when National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) released numbers that showed no real change. Ironically enough, builders are blaming the fact that Congress has continued to refuse to reach agreements on spending, taxes and budgets.

What is coming up in the news?

This week will be fairly quiet except we can anticipate a release of FOMC meeting minutes. This always provides some fodder for the mortgage markets but it is widely expected that there will be no real change in the current QE program. Wednesday we can also expect to see retail sales figures which could also have an impact on interest rates. The most significant impact could come on Thursday when we see the release of the jobless claims numbers.

Currently most investors believe that rates will temporarily hold steady. You can anticipate that if Congress balks on the confirmation of Mrs. Yellen or if you see lower than expected retail sales that we can see some movement. Generally speaking, it’s always a good idea to think about locking in if you have a good low rate.

If you are currently considering buying a home or refinancing a home, Core Mortgage Financial is here to help you determine whether it is a good idea to lock in a rate. There are many factors that can make rates fluctuate and you would not want to lose out on a low rate because you were unaware of what is happening in the markets. Call us today if you need help.

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