Mortgage Rate and Real Estate Update – Week of 11/13/12

Stocks fall helping mortgage rates remain low after election results.  Mortgage bonds sit on an important level and will help send rates up or down.  Find out which direction interest rates are heading.

Mortgage interest rate and real estate news from last week:

The bond markets and mortgage backed securities took the results of the Presidential election as a sign that further spending and stimulus could be in store until the economy makes a noticeable recovery.  Bond prices saw an immediate surge on Wednesday while stocks suffered.  As mortgage bond pricing reached resistance set back on October 12th, the bonds quickly reversed course and sent home loan rates back to the levels from previous weeks.  The short-term yet steep move in mortgage pricing is a perfect example of the window of opportunity that we look for to lock in a client’s interest rate.

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

With the Bond markets closed on Monday in observance of Veterans Day, Stocks and Bonds have both opened the week to the downside.  Driven in part by continued bad news out of China and now fears of investor confidence in Germany, the S&P 500 has closed once again below its 200-Day moving average, a previous stronghold for investors.  If the S&P continues to drop below this level, we expect that bonds and mortgage backed securities would benefit from further stock selling as their money flows into the safe-haven of bonds.

The economic news for the week will be highlighted by the Wednesday release of Retail Sales and the Thursday release of Core Consumer Price Index (CPI), a popular measure of inflation.  Now that the QE3 stimulus spending has had a chance to make an appearance in the markets, it will be interesting to see if inflation can continue to remain in check and within the Fed’s target range.  Remember that any news of rising inflation will likely have a direct impact on home loan rates going up.

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

Mortgage bonds continue to hold on to support at the 25 day moving average and slightly above the 50 day moving average.  These two levels of support should help keep interest rates from going much higher than their current levels.  With that in mind, we will be recommending our clients float their interest rate as we wait for the economic reports this week.  Longer term we are cautiously optimistic that interest rates could make a run at the historic levels reach last month, but will remain vigilant and take advantage of opportunities as interest rate see their short-term drops.

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.

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+Patrick Glaros empowers people to find their best home loan option. Through planning and education, and a goal-oriented approach, Patrick and the team at Dallas Mortgage Planners have one common goal: Help clients make an informed decision to choose the best home loan for their unique situation. Find other articles written by Patrick.

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