This week the US economic data continues to show an economy that is getting steadier after a shaky journey through most of the year. Producer inflation shows signs of heating up but consumer inflation remains nonexistent. The labor market data is improving and households are feeling confident enough to start unleashing some pent-up demand, held in check now for the past four years.
But Europe’s troubles remain front and center. Some in Europe are even comparing what they see in Europe to the conditions that created the depression that preceded World War II. Will it happen? Let’s hope everyone learned from that mistake.
Even with the improving economy, the Fed realizes that a housing recovery is KEY to a sustainable overall recovery, so they continue to buy mortgage backed securities. Add this to the fear created by the uncertainty in Europe and you have a recipe that pushes down on mortgage interest rates. This finally pushed rates below a floor that we have been unable to bread through the past 2 months. Buyers grab this early Christmas gift (or Hanukkah, Kwanzaa, etc. gift)…as it might not be there very long.
This week Freddie Mac’s 30 yr. fixed rate dipped to 3.94% assuming some fees and good credit.
Starkey Mortgage is an equal housing lender.
The views expressed are those of the author and do not represent Starkey Mortgage
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