Rates stayed basically the same this week with some ups and downs. The Fed continues to wind down their purchase of mortgages but what is keeping rates steady is the low inflation data. The overall consumer price index came in just over 2% year to year with the core index (stripping out volatile food and energy) just over 1%. Those low numbers calm inflation fears which keeps investors from requiring higher rates to compensation for inflation.
But the big news was the Fed’s statement that was made this week. The changes from their last statement shows that the Fed is gaining confidence in the
financial markets and economy. Here are some of those changes:
(1) The labor market is “stabilizing,” rather than showing “deterioration.”
(2) Business investment in equipment and software “has risen significantly,” rather than “appears to be picking up.”
(3) Housing starts are “flat” rather than “contracting.”
So the economic machine is picking up steam, but since we have lots of excess supply (unemployed people, factory capacity, vacant houses yet to sell, vacant commercial space, etc.) the economic machine will have to mop up that supply before it starts adding new stuff. What THAT means, as I’ve said before, is a slow but steady recovery, and that is good news.
State Bond Money still available with a rate of 5.65% and 3.5% Down Payment Assistance. Please remember that the final close date for this program is April 30, 2010.
This week rates ended up between 4.875% and 5.125%, depending on program, credit and points. Have a great weekend and call us so we can get you approved to buy.
Sr. Loan Consultant