Mortgage Market Update
Mortgage Market Update- March 3, 3013
This week for the first time since September of 2012, mortgage rates declined very slightly. Do not get too excited, this drop was minuscule in comparison to the financial news this week. Both domestic and overseas news could have caused a much bigger fluctuation in bond rates this week which could have gone either way for mortgage rates.
This week at home
The dreaded sequester went into full effect on March 1. Ironically it seems like the stock market decided to meet this whole event with a sigh instead of a shudder. In fact, the market is headed for all time highs, closing the week at 14,089.66. In large part, investors were encouraged by the great numbers that came out of the manufacturing report this week. The report, issued by Institute for Supply Management showed the manufacturing index rose to 54.2 which was a pleasant increase over January numbers. There is little doubt this helped boost the stock market.
This week abroad
The news abroad this week wasn’t so hot. last year put the UK on “negative outlook”, meaning they could downgrade its rating if performance deteriorates.
Last year, the credit rating agencies placed the UK on negative outlook. This week, Moody’s followed through and took away the UKs AAA rating which means they will pay more to borrow money. This is the first time since 1970 that the UK has had to face this type of downgrade but, most investors believed it was going to happen “in time” anyway.
The elections in Italy ended without a clear mandate for any party which could cause later problems. Additionally, there is widespread opposition in Italy to the austerity measures supported by the European Union (EU). Let’s keep in mind that austerity measures have not appeared to work to date where they have been implemented.
The US Financial Squeeze
Since sequester has now become the “law of the land”, we’ll have to watch what happens with job numbers, consumer spending and overall confidence. Let’s not forget that the market has largely ignored the sequester believing in part that some agreement would be reached. During March, yet another fight between Congress and the White House is due since the current spending resolution expires on March 27.
We’ll have to watch the employment numbers coming up on Friday. Reports last week were grim in terms of wage contraction indicating that workers have less money to spend. Other financial news will also have to be monitored carefully.
We’re currently in a climate where interest rates are going up and there is not much reason to believe they are going to be heading back down any time soon. This may be the last and best opportunity for those who have open applications to consider locking their rates. If you’re considering refinancing, sooner might be better than later. If you have questions or concerns about the current mortgage market, call Core Mortgage Financial today. We’ll help you make sense out of what’s going on and help you decide if this is the right time to consider a new mortgage or a refinance.