Mortgage Market Update
Mortgage Market Update- October 27, 2013
Current interest rates are still hovering at lower rates than expected. Borrowers who have an excellent credit rating are currently qualifying at or near a rate of four percent. This rate is lower than the rates have been over the last few months. They are also lower than might have been anticipated if the gridlock in Washington had not broken, however temporarily.
The upcoming weeks
There are a number of upcoming events that could make rates trend upward. Some of these include:
- Upcoming budget battles – with Washington in complete disagreement on what levels of spending should be implemented, the upcoming battles may provide a level of instability into the housing market and the bond market. Missed deadlines could result in a minor spike in interest rates
- Confirmation hearings – while most people agreed that Larry Summers should not be taking over as Fed Chairman, there are currently some rumblings about the upcoming hearings for Janet Yellin. Some members of Congress are considering bringing a bill to the floor which would require audits of the Federal Reserve and potentially force the Fed to stop using quantitative easing (QE) to help the economy. Should this bill pass, interest rates could spike quickly
- New debt ceiling – the current debt ceiling is not scheduled to expire until February of 2014. However, as budget talks proceed and other decisions are made in Washington, any potential threat to the level not being raised could be very negative for bonds meaning higher rates
Market forces changing slightly
Over the last few months, we’ve seen a slight improvement in overall unemployment numbers. However, it is important to note that the recent government shutdown has resulted in delayed reporting of some numbers. There is currently some speculation that the shutdown also had a negative impact on the unemployment numbers meaning we are likely to see another spike. This may ultimately help keep interest rates low as investors feel.
Another potential problem for rates may be seen when consumer confidence numbers are released later in October (the 29th). Currently the number is forecasted to come in at .2 percent. The last release was only .1 percent and many believe the current political climate may be reflected in the new report.
There are several pieces of news coming out this week that could have a minor impact on mortgage rates including:
10/28 Industrial production 10/29 Producer price index 10/29 Retail sales 10/30 ADP employment numbers 10/30 Core CPI (consumer price index)
Whether you are considering refinancing your existing mortgage or you are considering purchasing a home, it is critical you carefully monitor financial news and analysis to see where mortgage rates may be headed. A slight increase of only one-quarter of a percent can make a significant difference in what your monthly payments will be. Contact Core Mortgage Financial if you have any questions about your current rate and whether or not you can benefit from locking in a new rate today before rates start ticking up again.
NMLS #1743702 Rates, Programs, Guidelines are subject to change without notice