Current Interest Rates – Week of 7/9/12

Poor jobs report and bleak painting of future job growth lead home loan interest rates to all time lows. Sets the stage for best home buying and home refinance opportunities ever.

What happened with interest rates last week?

Interest rates moved a leg lower to set new all time lows for potential home buyers and homeowners. The Jobs Report was released last Friday showing that only 80,000 jobs were created in June, well below the 100,000 that were expected.

These gloomy reports, in combination with a stalling global economy, create uncertainty for stock and equity markets. The end result, money flows from those stocks and equities into the safe haven of bonds and mortgage backed securities, causing interest rates/yields to drop to record lows.

 

What’s coming up this week on the economic calendar and what’s the impact on interest rates?

Following the poor Jobs report here on the mainland, China and Japan released worse than expected economic data to start our trading week. While mortgage backed securities and bonds are trading at unprecedented levels, these lows could be affected by $66 billion in notes and bonds that will be auctioned this week.

The lackluster reports have also started to revive the talks of QE3 with the markets placing a 75% chance that further stimulus will be unveiled. Let the banter between Fed members begin and expect it to continue until the next Fed meeting in August.

 

Here’s our strategy for the days and weeks ahead…

Home loan interest rates continue to ride the wave of the US and global markets and as these markets continue to plunge, our home financing rates are doing the same. The advice to our clients closing in the days/weeks ahead would be to lock in your rate today, literally sitting at the best levels ever. Rates could continue to move lower, but our signals point to rates going back up to more “normal level” before they push lower in a longer time frame.

The chart below shows mortgage backed securities breaking through all previous resistance levels into historic and untested territory. With no real trading/technical data available at these levels, new resistance and support is being created daily/hourly. Resistance and support will become stronger as the levels are tested over time.

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.