Weekly Mortgage Update
| The week saw more impact from QE II. For those of you who have been on vacation, QE II stands for the Fed’s second round of ‘quantitative easing’ which is Fed-speak for printing more money. The people who invest their money in bonds (IOU’s that are paid back over time) are concerned that ‘printing money’ will make the dollar worth less in the future. Investors demand a higher return on their IOUs to make up for the money they lost by the dollar being worth less at the time it’s repaid. SO….rates go up. Mortgages are just another type of bond and so this is what happened to them this week. Over the past several weeks we have seen a full ½ percent increase in the 30 year mortgage rate.
Will rates go back down? Most likely not. If there is a melt-down in Europe, traders will run back to the dollar for safety and that will give us a brief drop in rates. But overall the economy does seem to be improving: Jobless claims are the lowest since September 2008 and the Philly Fed Manufacturing Index is telling us that companies are making stuff again. Add to this the fact that the Fed is devaluating the dollar (even though they say that’s NOT their goal) and inflation is almost a sure bet. As I’ve said before, as inflation goes, so go rates.
Oklahoma State Bond Program extended there program to allow closing till the 4th of February 2011. The rate is still 4.75% with 3.5% Down Payment Assistance.
This week 30 yr. fixed rates ranged between 4.375 & 4.625% depending on program, credit and points. |
| Ted Clay Sr. Loan Officer NMLSR # 217991 OK License # MLO01963 Office: 405-341-8644 |