Mortgage Market Update
Mortgage Market Update- February 17, 2013
While this weeks mortgage rates still continue to be below four percent, they are showing ongoing signs of trending slightly upwards. For many home buyers, Friday was a good time to lock in their interest rates, heading into a three-day weekend. This weeks news was a mixed bag and next week promises even more news.
This weeks news
The news this week was largely positive for the bond market. Unemployment shows signs of continuing to tick slightly downward, though at a more sluggish pace than would be needed for a robust rebound in the long-term rate. The current belief is that Fed Vice-Chairwoman Janet Yellen will be named to replace current Chairman Ben Bernake. For those who watch the mortgage market, this was good news as Yellen believes that the ongoing bond buying program is important to keep the economy moving. Not everyone on the Fed board agrees with this approach but it does currently appear this is a minority opinion.
Overall economic news
One of the best pieces of news to come out this week was the increase in retail sales. Overall, retail sales posted a modest gain but there is growing concern this will not continue. Keep in mind, January will be the first month since the payroll tax increase (e.g.., full SS tax being deducted) in more than two years. Manufacturing also came in higher and this is a good sign that manufacturing jobs may be on the increase. Gold prices have dropped to their lowest level in more than six months and may continue to decline as the sequester approaches.
Our overseas neighbors are not rebounding well in spite of what appears to be a stronger economy. The EU (European Union) contracted significantly during December, a 2.3 percent decline and even Japan who has had relatively good economic news saw some slowdown.
The week ahead
The upcoming week will be packed full of news that reflects how near or far from inflation we are. The Consumer Price Index (CPI) and Producer Price Index (PPI) will be released early in the week. Let’s not forget we’ll be seeing minutes from the last Fed meeting, which often results in movement in the mortgage market. Later in the week we’ll see Housing Starts and Existing Homes Sales numbers.
The G-20 (group of 20 nations) met this weekend and agreed to avoid currency wars between nations and overall pledged their support for the Feds monetary easing policies. For homeowners and buyers who were considering locking in their rates, Tuesday will provide the first opportunity since the markets will be closed in observance of President’s Day. Core Mortgage Financial is here to answer any questions you might have about the current state of the mortgage markets. Whether you are interested in buying or refinancing, we can help you find the right mortgage loan to meet your needs and help you take advantage of the current low rates.