Market Overview, Mortgage News, Weekly Review

What’s News for Mortgage Rates This Week: January 24th

January 24, 2011 by · Leave a Comment 

Great Time to Buy a Home by James BarathIn housing news last week, Existing Home Sales for December were reported much better than expected. The jump in sales is likely attributed in part to the recent trend of rising home loan rates, which has prompted many homebuyers to take advantage of the still low home loan rates.

Building Permits – which signal future construction – also came in better than expected last week, surging 17% in December. 2011 looks to be on track for agood year for the housing industry.

There will still be some areas that suffer price declines and those will be where foreclosure backlogs overhang and where unemployment rates are even higher than the national average. But housing has bottomed out in many areas and should see more of a pick up in the second half of 2011.

And although home loan rates will likely rise slightly as the year progresses, they are still near all-time lows right now. That means homebuyers still have a tremendous opportunity in front of them.

Both mortgage bonds and home loan rates maintained their overall negative trend last week and ended the week worse. This week includes a full load of economic reports ranging from housing and the economy – but the big event will be the Fed Meeting.

  • We’ll start the week with a read on consumer attitudes with the Consumer Confidence report on Tuesday. That report will be followed by the Consumer Sentiment Index on Friday.
  • We’ll also see additional housing news this week, with a report on New Home Sales in December due out Wednesday and the Pending Home Sales report for December due out Thursday.
  • The Federal Reserve will also hold its FOMC meeting this Tuesday and Wednesday, with the Fed’s Policy Statement due for release Wednesday afternoon. There’s no chance for an interest rate hike at this meeting – but what the Fed says about the economy, inflation, and its Quantitative Easing program could have an impact on rates.
  • Thursday’s weekly Initial and Continuing Jobless Claims Report will be important, as always. Last week Initial Jobless Claims came in below expectations and the 4-week moving average fell from the previous week. Those readings tell us the trend in the labor market is continuing to improve…albeit at a slower pace than historically seen at this stage within an economic recovery.
  • We’ll also get a read on the economic recovery with Durable Good Orders on Thursday. This report gives us an update on consumer and business buying behavior on big-ticket items that are designed to last for an extended period of time, like furniture, televisions, appliances, vehicles, copy machines, and so on. It’s an interesting report, as people tend to hold back on these types of purchases when they are feeling a need to be extra conservative with their finances or feel insecure about their employment.
  • The GDP report will be followed on Friday with reports on Gross Domestic Product (GDP) – which is the broadest measure of economic activity – and the Employment Cost Index (ECI). The ECI is one way to evaluate wage trends and the risk of wage inflation, as well as possible price pressures. This is important to the housing industry because if wage inflation threatens, it is possible home loan rates will rise through Bond prices dropping.

This is What’s News for Mortgage Rates This Week: January 24th.

Quick general rule of thumb when keeping an eye on mortgage rates.

Strong Economic News: $$$ from Bonds —> Stocks = Home Loan Rates Worsen

Weak Economic News: $$$ from Stocks —> Bonds = Home Loan Rates Improve

If you or someone you know is thinking about buying a home, the combination of low home loan rates and affordable home prices make this an ideal time to buy a home. Call or text me at 512-522-7284 to discuss your personal situation and your home loan options. Your path to homeownership starts right now!

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James K Barath, CMPS®

James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, Certified Military Housing Specialist® and your FHA Home Loan Expert. He is also a graduate of Purdue University, The CMPS Institute, Dale Carnegie Human Relations Course & Napoleon Hill Foundation's PMA Science of Success Class. It's your home and your future. It's his profession and his passion. He is ready to work for your best interest. Contact James for your FREE Home Loan Approval !  His Motto: I Facilitate the American Dream Through Responsible Mortgage Lending and Financial Literacy!

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