Mortgage Market Update
Mortgage Market Update, November 17, 2012
As if the election didn’t provide enough excitement in the market, we are now facing the fiscal cliff unless the Senate, Congress and President can negotiate a way out of the upcoming mess. One of the positive sides of this calamity is that mortgage interest rates continue to be somewhat low simply because investors are fleeing the stock market and looking for more safety.
Overseas market matters
With the unsettling news that Israel is now responding to threats and bombs are hitting the Gaza Strip, the Middle East continues to drive some of the decline we are seeing in the stock market. However, additional concerns arose when the third quarter gross domestic product in the Eurozone saw more decline, even though that decline was relatively small, only one tenth of a percent. Naturally the primary problem is that the pressures of the overseas markets continue to put growing pressure on US stock markets.
US economic concerns
Companies of all sizes are naturally concerned about the potential of the fiscal cliff. This uncertainty may explain the flight to more safe mortgage backed securities which does help keep the bond market active. However, it’s important to note that the stock market is currently at five month lows, and the potential exists that once a deal is reached on the fiscal cliff, investors may return to the stock market and flee the bond market. The overall result of this could be higher mortgage interest rates.
This months jobless claims are expected to be problematic as the system attempts to absorb the employment changes as a result of Hurricane Sandy. However, there are other concerns that must be considered as well. First, core inflation showed an uptick of nearly 2 percent over one year ago. Another concern is the ongoing dissension among members of the Federal Reserve regarding quantitative easing efforts. One must also continue to see if Ben Bernake will stay on board as Fed Chairman past January of 2014, but that should not have an impact on current rates. As we’ve stated before, this may be the ideal time to consider buying a home or refinancing. Another item of concern to be aware of is the upcoming report from the FHA which will impact all new mortgages and may impact some existing mortgages. Core Mortgage Financial is determined to stay up to date regarding all mortgage market changes that may impact our clients. Call us today for help with your purchase or refinance mortgage.
Disclaimer: Mortgage Market update for November 12-16, 2012. This article is for informational purposes only. The mortgage market update should not be used for rate lock guidance.