Weekly Mortgage Update
| Inflation is back in the news. The Personal Consumption Expenditure Index (The Fed’s measure of inflation) came in higher this week. The Case-Shiller Home Price Index surprised the market by showing our first increase in home prices in 8 months. Pending Home Sales blew the doors off of the estimates coming in at an 8.2% increase – the previous month it was down 11.6% so that is a huge swing. And finally, the Chicago Purchasing Manager’s Index came in at 61, indicating that businesses are ramping up for improved economic activity. As the economy heats up, inflation heats up and so rates rise to compensate.
Also, the ‘flight to safety’ effect of the Euro reversed a bit this week as Greece passed their austerity package and money flowed out of the US bond market and back to Europe. Combine this with the ending of the Fed’s purchase of treasury bonds and mortgages and you have a HUGE amount of money that was buying bonds and mortgages removed from the equation. When there are less buyers of your product, you have to sweeten the deal for the remaining buyers to pick up the slack. In short, rates are headed back up.
Oklahoma Housing Finance Agency reduced there rate to 5.0% this week with 3.5% down payment assistance.
This week Freddie Mac’s 30 yr. fixed rate survey ended up at 4.51%, depending on program, credit and points.
MAKE IT A GREAT 4TH OF JULY WEEKEND! |
| 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 tclay@wrstarkey.com www.TedClay.com WR Starkey Mortgage, LLP NMLSR # 2146 |