Mortgage Market Update
Mid-week, mortgage rates ticked slightly upwards and caused many to believe that for the first time in several weeks we would be greeted with an increase in mortgage rates. These slight increases in rates were primarily driven by some negative news including an increase in unemployment insurance applications, lower than expected earnings at Bank of America and of course, some overseas news that had a downward impact on US Treasuries.
Fortunately for many investors, the trends didn’t put that much pressure on the sale of mortgage backed securities (MBS) as part of the current quantitative easing program. Most financial news was very mixed this week with some positives, some negatives and a couple of pieces of news that had little or no impact on the overall mortgage market.
Good news for many
Retail sales, housing starts and consumer confidence continue to tick slightly upwards. In addition, factory production continues to show upward trends hopefully signifying the economy is continuing to move in the right direction. Since the holiday season isn’t far off, we’ll be keeping an even closer eye on consumer spending and confidence over the next few months. This week, the average price of gasoline also ticked down slightly, good news for all consumers. Recently, USA Today suggests that gas prices could drop as much as fifty cents a gallon over the fall.
Not all good news
There continue to be some signals that the recovery is still weak and that the last unemployment figures were not a signal of more positive job numbers. In fact, new unemployment claims rose slightly this past week. Additional signals of the continuing sluggishness of the recovery included lower than expected earnings in the mortgage banking sector, and no signs that Spain is going to be recovering any time soon. Cyberattacks on financial institutions also were a grave concern this past week and are something worth watching.
Fortunately, in spite of signs that the mortgage rates would tick slightly higher this week, the end of week rally (which wasn’t really a rally) shows that mortgage rates are holding at low levels. Ths is great news for those who are considering purchasing a new home or refinancing their home. If you are one of the thousands of people who are considering taking advantage of lower interest rates, contact Core Mortgage Financial and let us help you find the right mortgage program for your needs. We have no way of knowing how long the current low rates will hold at the current level.
NMLS #1743702. Our mortgage market update is strictly an informational article. This should not be used as mortgage rate lock guidance. October 15-19, 2012