|This week saw some good news as far as rates are concerned and we had a small drop in rates as a result. But if you look at the overall trading channel for mortgage backed securities (how yours and my mortgages are bought and sold), you’ll see a steady upward trend firmly in place. So don’t be fooled.
What happened this week was a trifecta of rate movers:
1st – Inflation came in almost non existent at the consumer level. This is the big force that drives rates up or down. Why no inflation? Because there is still too much excess capacity in the economy. Companies can produce more with the same people and equipment without adding to their cost.
2nd – The ‘flight to safety’ due to the Euro Zone is back in the picture. Sovereign debt from Greece, Ireland and Portugal is scaring the bond world causing them to send their money to the US for safety. As a result, which you already know if you are long time reader, is that the bond makers (for us that is Fannie and Freddie) don’t have to give as high of an interest rate since they will receive the world’s money anyway.
3rd – Earnings came out weak for Alcoa, Bank of America and Google causing money to leave the stock market for the bond market, which in turn caused rates on bonds to dip a bit.
All in all not bad a bad week for mortgage rates, creating a GREAT opportunity for your buyers to grab now, before it changes.
This week Freddie Mac’s 30 yr. fixed rate survey ranged between 4.875% and 5.0% depending on program, credit and points.
Senior Loan Officer
Senior Loan Consultant
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Office: 405-341-8644 x 102
WR Starkey Mortgage, LLP NMLSR # 2146