Category: Mortgage Rates

For the third week in a row, mortgage markets improved early in the week, only to give back the gains before Friday’s close. Mortgage rates ended last week exactly where they started.  However, if you locked your mortgage rate Tuesday, you got a rate decidedly lower than someone who waited until Friday. Last week, one of the biggest mortgage rate drivers was a series of surprisingly strong corporate earning reports, including those from financial firms Goldman Sachs and Citigroup. The positive reports pushed the Dow Jones Industrial Average to its 6th consecutive weekly gain.  This is the market’s longest winning streak in two years and its best 6-week rally since 1938, in percentage terms. In part, the rally is boosting Consumer Sentiment, too.  According to a survey, Americans are feeling better about the economy than at any time since last September’s meltdown. But while stock market rallies and rising consumer sentiment can be good for our investment portfolios, they’re not always welcome when […]

Don’t look now but oil prices are climbing. This should worry today’s home buyers and would-be refinancers because some of the same forces that helped to push crude past $50 for the first time in 4 months also cause mortgage rates to rise. March 18, the Federal Reserve committed an additional $1.15 trillion to support the economy.  Since the announcement, investors have questioned whether the Fed is purposefully spurring inflation.  The Fed’s total debt purchases now total $1.75 trillion. And to finance its purchases, the Federal Reserve is printing new money, devaluing the U.S. dollar along the way.  This then leads to inflation which, all things equal, causes oil prices to rise, gas prices to rise, and mortgage rates to go with them. As we’ve seen the last few summers, oil prices and mortgages seem to touch their yearly high points while the weather is warmest. (Image courtesy: The Wall Street Journal)

The Federal Open Market Committee voted to leave the Fed Funds Rate unchanged today, within the target range of 0.000-0.250 percent.  This doesn’t mean the Fed stood pat, however. On plan to resurrect the economy using “all available tools”, today, the Fed announced a new, $1.5 trillion round of fiscal support for the treasury and mortgage markets. The stimulus will likely be Thursday morning’s headline story. In its press release, the FOMC touched upon a few of the prevailing economic issues, using these points as a legitimizing backdrop for its newest debt load: Job losses and wealth loss are dragging down consumer spending Some U.S. trading partners are falling into recession Businesses are cutting back on investment and inventory Of interest is that the FOMC said today’s inflation levels may be too low to support economic growth at all.  This condition is more commonly called deflation.  The Fed’s latest actions, therefore, may be a deliberate attempt to induce inflation through […]