Weekly Mortgage Update

Rates continue to rise this week as the European Central Bank raised their rate .25%.  This signaled that at least the Europeans are acknowledging the threat of inflation.  This depressed the value of the dollar relative to the Euro and created upward pressure on rates in the US.  But the Fed announced that they  will continue to buy bonds per their schedule and not terminate their QE II program prematurely, and this is helping to keep rates from going up too fast.  So, like the economy, rates continue their slow but relentless march upward.  As I’ve said before, we will see some minor fluctuation, but once again we have confirmation in the markets that mortgage rates are NOT going back down to the mid 4% range.  Underscoring this, Bill Gross, president of Pimco which the world’s larges bond fund, again came out bearish on the bond market telling us that he also expects rates to rise.

For those thinking that the US Government shut down might help push rates lower, won’t happen.  Even if it did, the shutdown would actually push rates up a bit due to the impact on the dollar vs. other world currencies.

Finally, at some point in the not too distant future, the Fed will start to unload all the bonds and mortgages they have purchased.  When they do, this will DEFINITELY add to the upward push on rates.

This week Freddie Mac’s 30 yr. fixed rate survey ranged between 4.875% and 5.25% depending on program, credit and points.

Ted Clay
Senior Loan Officer
Senior Loan Consultant

NMLSR # 217991
OK License # MLO01963
Office: 405-341-8644 x 102
Cell: 405-826-1320
Fax: 866-208-5309

WR Starkey Mortgage, LLP NMLSR # 2146
10 E. Campbell
Edmond, OK 73034

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