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What’s News for Mortgage Rates This Week: May 16th

Chicago Bulls circa Jordan and Pippen DaysBulls Win…Bulls Win…Bulls Win! This is definitely not the Bulls team that won 6 championships when Michael Jordan and Scottie Pippen were the dyanmic duo of the NBA. This year’s team led by NBA MVP Derrick Rose is made up of a whole cast of role players.

Similar to the Chicago Bulls, it’s not just the key economic reports like the Employment Report and the FOMC that guarantees economic performance. It is the basic economic reports that will set the pace. This week the financial markets will just do that…get back to basics.

There are no Treasury auctions this week. Last week the bond and mortgage markets were generally unchanged with the 10 yr treasury note testing and failing to break the low yield set in early March at 3.14%. Although interest rates are seemingly stuck at the present levels, the outlook remains positive for interest rates staying low as long as the equity markets, the dollar and commodity prices trade soft.

Data this week include several reports affecting the real estate industry.  The first report will be April Housing Starts and April Building Permits on Tuesday. April Existing Home Sales will be released on Thursday. Even though Building Permits are expected to come in lower, both Housing Starts and Existing Home Sales should show signs of improvement.

Business activity will also be on the hot seat this week with the release of April Industrial Production, April Capacity Utilization on Wednesday and the Philadelphia Fed Index on Thursday. The overall sentiment is that things are slowing down in the business sector. Crude oil and other key commodities have recently declined with many believing the huge run-up in all commodities has abated.

Bernanke and the Fed have repeatedly stated that the increase in commodity prices is “transitory”, this week may be the litmus test. We expect most markets to be volatile with prices of interest rates, stocks, and all commodities swinging day to day. If crude oil resumes its run higher, however, the bond and mortgage markets will likely struggle and come under some selling pressure.

The calendar this week has the following key economic reports:

Key Economic Reports for Week of May 16th by James Barath

This is What’s News for Mortgage Rates This Week: May 16th.

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. Want to know if you can afford a new home? Call or text me at 512-522-7284 to discuss your personal situation and your home loan options!

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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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