Mortgage Market Update
Mortgage Market Update- June 9, 2013
Anyone who has been watching the stock market lately may feel like they have been on a bit of a roller coaster with the market closing up then closing down. While fluctuations in the market are fairly common, the recent swings are indicative of the uncertainty regarding the current bond-buying by the Federal Reserve. Earlier this week, many investors were concerned that if the jobs report came in better than expected that the Federal Reserve would tamper down their bond-buying efforts. As it turned out, the jobs report came in slightly better than expectations. However, because the unemployment rate ticked up slightly, the stock market once again went up.
What’s causing the swings?
Many market speculators are concerned that if the economic news continues to be too good, that the Federal Reserve will pull back on their bond buying program. While this is certainly going to be the case at some point, it is important to note this is not going to happen overnight. In fact, it is more likely that the scaling back will be very gradual to make sure that there is not a severe impact on both the stock and bonds market.
What are bond rates now?
Current bond rates are at 15 month highs, but are still relatively low. In fact, most homeowner’s and home buyers can still find mortgages at well below five percent provided they have good credit. The current rate is climbing slowly and provided that upcoming economic data continues to show strength, we can probably anticipate rates continuing to climb over the next several weeks and months.
What economic data is coming up?
One of the most important numbers coming up this week is retail sales. It is important to keep in mind that nearly three quarters of our economy is driven by retail sales. Strong numbers when this report is released on Thursday may give us some insight into consumer sentiment numbers which will be released on Friday. This week will also be notable for the three treasury auctions as well as the producer price index which will also be released on Friday.
What’s happening overseas?
Whether we like it or not, our economic numbers are often driven by overseas news which we have very little, if any, control over. The most notable news is that the European Central Bank (ECB) has made no change on rates and there continues to be a clash over whether or not austerity measures are helping or hindering growth overseas.
Over the next ten days, there is likely to be a great deal of speculation on how the Federal Reserve is going to respond to the current modest to moderate growth (as described by the Beige Book). Until the minutes are released however, we still will not know what the overall mood at the Fed is regarding current bond sales levels. While interest rates are still below 5 percent, it is a good time to consider buying a home. For those who have a current mortgage where they are paying over 6 percent, this might be a good time to consider refinancing. At Core Mortgage Financial, we’re here to help you make the best possible decisions about home-buying or refinancing based on your current financial situation. Call us today for a consultation and let us help you determine if this is the right time for you to take advantage of current mortgage rates.