Mortgage Market Update
Mortgage Market Update- April 21, 2013
Much of this week was disruptive to the typical news cycle primarily because of the events in Boston on Patriots Day. However, since the financial markets were open there was still a fair amount of activity going on. The net takeaway for the mortgage market this week was a slight down-tick in rates, reaching the lowest rates we’ve seen in about three months.
What caused the down-tick?
Financial news that impacted rates this week included lower than expected inflation rates. In fact, Core CPI was just 1.9 percent higher than this time last year. This is good news for the mortgage market for the simple reason that the fed has indicated their propensity for scaling back their bond-buying program if inflation seems to be increasing too quickly. In addition, China reported low GDP growth for their first quarter and because of this, many prices including gold, oil and copper dropped sharply last week which also was good for rates. When the Fed’s Beige Book data was released, the overall economy was forecasted to grow only about two percent this year. When you combine modest growth and low inflation, it is always good news for rates.
The upcoming week
The upcoming week doesn’t have much to offer in terms of new data. You’ll see the following reports released this week which may have some impact on rates:
- Monday: Existing Home sales reports
- Tuesday: New Home sales reports and Treasury auction
- Wednesday: Durable goods orders – this report will be important because it will provide an idea of overall economic growth. There will also be a Treasury auction
- Thursday Consumer sentiment data will be released and the final Treasury auction of the week
- Friday we’ll see the broadest measure of economic growth, namely first quarter GDP
What to consider
If you are considering refinancing your home or you are considering buying a home it may be a good idea to think about locking in your rate this week. With the upcoming reports, there may be a slight upward move in rates over the upcoming week. While this is not ground in stone, there is always that possibility. Freddie Mac indicated this weeks rates for 30 year mortgages were as low as 3.41 percent (3.59% APR), so borrowers who have excellent credit and rates above 5 percent may want to consider refinancing now.
For those who are uncertain about applying for a mortgage or who may be considering refinancing, contact Core Mortgage Financial. We’ll evaluate your current mortgage and help you decide if refinancing is the right move for your overall financial situation. It costs nothing to evaluate your mortgage and refinancing could save you hundreds of dollars a year and thousands over the life of your loan.