Mortgage Market Update
Mortgage Market Update- March 17, 2013
Mortgage rates did not quite keep up with the bond market this week. In fact, changes this week would have indicated rates would have changed more this past week than they did. However, in spite of that, the rates did move slightly downward this week.
Home buyers and those who are refinancing shouldn’t take this drop in rates for granted and hope that it will extend into the coming week however. In fact, there are a lot of things going on that indicate we may not see rates this low for a while.
For example, this past week, the retail sales report showed a healthy 1.1 percent increase which was higher than expected. Many believed the steady climb of gas prices would have impacted sales more than they have but consumers seem to be taking higher gas prices in stride. While the Consumer Price Index increased more than one half a percent in January, Core CPI increased far more modestly, less than one quarter of a percent.
During the week ahead, the Federal Reserve meeting will be where everyone watches. Bond markets will be looking for a signal that the bond buying by the Fed will be scaled back due to improved economic news. There is currently no indication this will happen but is worth watching.
The “big 4” for this week included:
- Retail Sales posted the biggest monthly increase since September 2012
- The Dow stock index continued to climb to record highs
- The dollar rose to the highest value versus the yen since August 2009
- Fitch downgraded the sovereign debt of Italy
Over the next week, the news to watch will include budget talks and their impact on mortgage rates, the Housing Starts and Existing Home Sales reports and of course the Fed meeting on Wednesday. Keep in mind that budget talks should be monitored because effective March 27, there has to be a new spending plan in place or the government will shut down temporarily until there is a spending bill to keep it working.
One again we are urging people to consider locking in their rates. This goes for those who are currently pending approval on a new home purchase or those who are considering refinancing their homes. While the stock market continues its march ever upwards, there may be less of a flight to safety – meaning fewer people are buying bond which naturally depresses their prices. A strong stock market does not always translate into a strong bond market as people tend to be more willing to take risks.
Regardless of what stage of home buying or mortgage refinancing you are currently at, consider contacting Core Mortgage Financial. We can help you evaluate your individual situation and see if locking a rate in is the best financial move for your needs. The last thing you want to do is lose out on a loan because interest rates have gotten higher than you are willing to pay.