Mortgage Market Update- August 21, 2013
The mortgage market this past week resulted in higher interest rates for those looking for new homes or refinancing their existing homes. The reasons behind this are pure speculation: The Federal Reserve may stop the bond buying program because new unemployment claims hit a low not seen in six years.
Why this matters
For several weeks, there has been ongoing speculation the Fed would stop the QE program they have been running to keep interest rates low. However, the markets are getting increasingly nervous as economic news continues to be positive. However, it is important to note that there is a significant chance the bond buying program will most likely not come to a screeching halt. Instead, the Fed will most likely taper this program off to ensure the markets do not over-react (much like what they are doing now).
Slow news cycle
This week will also not offer much in the way of new economic data. Some of the upcoming news may help drive rates even more including:
Existing home sales
Federal Reserve Minutes
Initial Unemployment Claims for last week
New Home Sales for July
None of these reports, outside of perhaps the Fed minutes, will drive the market too much in one direction or another. However, there is little doubt that as more economic data comes in that is positive, we will continue to see rates rising.
Many who are refinancing an existing property or financing a new home often struggle with whether or not to lock in their interest rates at the time of their application. Keep in mind that locking a rate in often means paying extra points or paying a small fee upfront. However, the fee that you might incur could be worthwhile over the life of your loan.
Whether you are purchasing a home or you are consider a refinance on your existing home, the time may be running short to lock in lower rates. Contact Core Mortgage Financial today and let us help you evaluate whether or not this is the right time for you to consider locking a rate in at today’s lower rates. Keep in mind, the markets are all indicating higher long-term interest rates so time may be running out.
NMLS #1743702 Rates, Programs, Guidelines are subject to change without notice