Mortgage Market Update
The mortgage loan markets turned upwards this week, resulting in a slightly higher rate for 15 and 30 year mortgage loans. This is in spite of a slight uptick in unemployment and no action on the part of the Fed or the European Central Bank. Many Fed and ECB watchers thought they would see some easing offered by the Fed. Many also expected news from the ECB regarding the debt crisis plaguing Italy and Spain.
In spite of no action from either of these authorities, mortgage rates did rise modestly, up .06 on 30 year mortgages and a smaller .03 on 15 year rates. There are still many lenders making mortgages available at rates under 3 percent, including 15 year mortgages and five year adjustable rate mortgages.
While many believed that Friday’s unemployment numbers would hav ae negative impact on the markets, it turns out that in spite of a slight uptick in overall unemployment, more jobs were created in July than anticipated. This is good news for the overall economy but, as seems to be typical, not so good for the mortgage markets.
While the Fed promised an additional round of stimulus through quantitative easing if the weakness in the job market continued, Friday’s report may deter any immediate action. As home prices continue to increase modestly and mortgage market rates stay low, more people may take advantage of purchasing new homes. Many mortgage market watchers believe that more refinancing will occur since rates and mortgage fees remain very low.