Mortgage Rate and Real Estate Update – Week of 11/19/12
The ‘Fiscal Cliff’ looms into the holiday season, but we are thankful for what we have in front of us. A strong Texas housing market and interest rates lower than anyone could expect, we have many reason to give thanks…
Mortgage interest rate and real estate news from last week:
- Rising sales and lowest inventory in six years helps home prices rise 11.1 percent from a year ago
- Investors making record profits as single-family rental demand is causing rents to far exceed supply
- We’re fortunate to be closing refi’s in 30 days, while National Loan Processing Time Increases to 54 Days
- FHA hopes to avoid its own ‘fiscal cliff’ as expected budget shortage of $16.3 billion consumes their portfolio of insured home mortgages
Mortgage bonds have traded in a sideways pattern for the better part of a week as the markets await a resolution to congressional budgets and extensions to avoid a ‘fiscal cliff’. The metaphor of the cliff is pretty accurate for stocks and home loan rates, as a failure to reach a resolution could send stocks falling along with mortgage rates. However, as talks of a resolution start to surface and existing home sales were reported stronger than expected, we have seen stocks rally higher at the expense of Bonds and home loan rates.
What’s coming up this week on the economic calendar and what’s the impact on interest rates?
As the President and lawmakers try to iron out details surrounding the congressional budget, the main focuses are to avoid tax increases and spending cuts that would likely send the U.S. economy into a recession. Progress will be halted until Congress resumes their session on November 26th, so stocks and Bonds are likely to stay calm during this Thanksgiving week.
On the economic calendar, New Housing Starts and Building Permits will be released tomorrow to finish out the housing reports for the week. Initial Jobless Claims will be released on Wednesday. With the stock and Bond markets closed on Thursday and both markets closing early on Friday, we don’t expect much volatility throughout the week.
Here’s our strategy for the days and weeks ahead…
Home loan rates continue to trade in a tight range and are holding above support at the 25 day moving average. With little news expected and no treasury auctions this week, mortgage rates should manage to hold onto their near historic lows. With the ‘Fiscal Cliff’ looming, we will be monitoring the newswires closely. Any talks of an agreement will send stocks higher and will likely send home loan interest rates higher.
We maintain an ongoing dialogue with our clients about the market and interest rates throughout their financing experience so we can take advantage of the lowest rates when they present themselves. We all want the lowest rate, and the best way to ensure that you get the lowest rate, is to build a relationship with your mortgage planner, so they can best advise you on when to lock in your rate. Call us today for a complimentary mortgage review or Apply Online.
