Market Insight, Market Overview, Mortgage Rates

The Week Ahead for Mortgage Rates: April 30, 2012

April 30, 2012 by · 1 Comment 

Young Lady Thinking by Tsuji | iStockphoto.comMortgage markets were mostly unchanged last week for the second straight week. Spain made few moves to diminish concerns from its investors, the Federal Reserve did little to change its message on the U.S. economy, and newly-released economic data was in-line with expectations.

Conforming mortgage rates in Northwest Indiana and suburbs of Chicago Illinois idled last week; remaining near all-time lows for the 30-year fixed rate mortgage, the 15-year fixed rate mortgage, and the 5-year ARM.

According to Freddie Mac’s weekly mortgage rate survey, last week’s mortgage rates, as averaged from more than 125 banks nationwide, were as follows :

  • 30-year fixed rate mortgage : 3.88% with 0.7 discount points
  • 15-year fixed rate mortgage : 3.12% with 0.6 discount points
  • 5-year adjustable rate mortgage : 2.85% with 0.6 discount points

Click here to see today’s mortgage rates.

A discount point is a one-time closing cost and is equal to one percent of your overall loan size. This means that a mortgage applicant with a $100,000 mortgage and an accompanying 0.7 discount points would be responsible for paying an upfront charge of $700 at the time of closing.

Freddie Mac’s mortgage rates assume full closing costs, too.

This week, it’s unclear whether mortgage rates in Northwest Indiana and suburbs of Chicago Illinois will rise or fall.

There are few economic data points due for release so mortgage markets are expected to take their cues from Europe where there’s no shortage of story lines.

In Spain, there are protests over new austerity measures. In France, a new President may be elected who opposes austerity. In the Netherlands, a new budget passed that includes austerity measures, but barely.

Click here to see today’s mortgage rates.

Each storyline generates uncertainty about the future of Europe and its unified economy. As the uncertainty grows, global investors seek safety in the U.S. mrotgage bond market, a move that helps mortgage rate shoppers. When demand for mortgage bonds is high, mortgage rates tend to improve.

Also affecting mortgage rates this week will be Friday’s Non-Farm Payrolls report.

The economy is expected to have added 165,000 net new jobs in April and the Unemployment Rate is believed to have remained unchanged at 8.2%. If there is a deviation from either of these expectations, mortgage rates will change. If the actual jobs data is stronger than Wall Street expectations, mortgage rates are likely to rise.

If the jobs report is weak, mortgage rates should fall.

This is The Week Ahead for Mortgage Rates: April 30, 2012.

Click here to see today’s mortgage rates.

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

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

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

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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