Mortgage Rate and Real Estate Update – Week of 11/26/12
It’s not a cyber Monday sale, home loan rates have actually been this low for a while now. Thanks to the fiscal cliff issues and Eurozone drama being front and center, interest rates are holding strong near historic lows.
Mortgage interest rate and real estate news from last week:
- Low mortgage rates allow buyers to afford up to 20% more in home price compared to 3 years ago
- The Fall and Rise of Jumbos – Homes values with jumbo mortgages fell hard, now rising Fast
- “G-Fees” drive up loan costs across the board for some states – Texas lucky to avoid this round, for now…
- Holiday tidbit – Wanting your own ’12 Days of Christmas’? The cost this year tops $107k
In a holiday shortened trading week, home loan interest rates and mortgage bonds were mostly unchanged. News that Europe is now in the midst of its second recession in four years and the U.S. weekly jobless claims coming it at their highest level in 18 months would typically spark more volatility, but interest rates seem to be comfortable in the current trading range established over the last month near historic lows. The low volume trading and friendly Bond news allows the Fed to keep their QE3 stimulus funds available for any major volatility that may come to the markets.
What’s coming up this week on the economic calendar and what’s the impact on interest rates?
With no major economic reports due for release this week, most attention will be placed on talks of a lawmakers reaching a resolution on the fiscal cliff issues. The markets will also be closely watching a meeting of finance ministers in the Eurozone as they digest news of the recession. The battle grows deeper as major Euro countries like Germany, refuse to participate in further “bail-outs” of Greece unless they can make further budget cuts and commit to repay some of their debt.
In the midst of the global economic soap opera, the Treasury will be auctioning off $99 Billion in Notes this week. Depending on the investor appetite of the 2, 5, and 7 year Note auctions, we could see volatility creep back into the Bond markets. On the flip side, should the auction go well, the S&P 500 could slip further from its 200 day moving average, allowing home loan rates to move closer to all time lows.
Here’s our strategy for the days and weeks ahead…
Interest rates for home loans have found a comfortable trading range over the last 30 days and have managed to create a solid level of support just beneath current levels. As long as mortgage Bonds can manage to remain above this key technical support, interest rates have a great chance to rally and move closer to all time lows for interest rates. Our advice would be to float in the near term unless something changes, causing pricing to break through support. With the amazingly low interest rates available to homeowners and home buyers, the time is now to consider their options for a refinance or start their planning for a home purchase.
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.