Mortgage Market Update
Mortgage Market Update – September 15, 2013
For those who have been considering refinancing their homes or considering buying a home, the last few weeks may have felt like a bit of a roller coaster. Mortgage rates have been trending slightly upwards though have not yet broken through the five percent range. Today, the thirty year mortgage rates are slightly below five percent and we shouldn’t expect too much movement ahead of the Federal Reserve meeting on Wednesday. In fact, Friday’s rates were actually better than they had been all week long.
What happened on Friday?
Consumer economic data came out and showed that consumers are less bullish about their finances than the improving economy would lead you to believe. In fact, consumer sentiment numbers came in lower than expected. On top of that, retail sales were lower as well meaning consumers are spending less money.
What happens after the Fed meeting?
On Wednesday we can expect the Fed to announce if they will begin tapering their bond-buying program. There has been a fair amount of discussion about this over the last few months but so far there has been no movement. However, with unemployment rates heading down and the continued strength of the stock market, this week may signal the beginning of the end of this program. Should this occur, we can expect rates to tick significantly upwards. Keep in mind, chances are the Fed will not stop this program immediately, instead they are likely to begin slowly tapering off.
What does this mean for mortgages?
Assuming the Fed does begin tapering off the bond buying program, we can anticipate rates on mortgages will start heading upwards. In fact, if you are currently committed to purchasing a home or you are in the process of refinancing, it may be a good idea to lock your rate in ahead of the Wednesday release of minutes. While there is a chance you may lock in around 4.5 percent, you do not want to risk facing a five percent rate should the Fed announce a tapering.
The upcoming week
The upcoming week will bring a fair amount of economic news which we should monitor closely. Some of these reports include
- September 17 – CPI (Consumer Price Index)
- September 18 -Housing starts and Building permits
- September 19 – Existing home sales
These three reports will likely have an impact on mortgage rates whether the Fed acts on Wednesday or not.
If you are uncertain about locking you rate in, consider calling Core Mortgage Financial. We’ll evaluate your current mortgage refinance or purchase application and advise you on what course is best for your individual needs.