Mortgage Rates

The Week Ahead for Mortgage Rates: July 16, 2012

July 16, 2012 by · Leave a Comment 

Retail SalesMortgage markets improved last week on slowing economic growth worldwide and investor thirst for “safe” investments.

China’s economy posted its weakest growth since 2009 and economic activity in the Eurozone continued to sag. Both events resulted in a broad-based sell-off of equities and non-U.S. bonds. Mortgage bonds benefited from last week’s flight-to-quality as bond pricing moved higher.

When mortgage bond prices rise, mortgage rates fall.

Click here to see today’s mortgage rates.

According to Freddie Mac, the average 30-year fixed rate mortgage rate is now down to 3.56% nationwide for borrowers willing to pay 0.7 discount points plus a full set of closing costs. The 15-year fixed rate mortgage fell to 2.86%, on average.

Mortgage rates are all-time records, rewarding today’s Northwest Indiana home buyers and mortgage rate shoppers. The principal + interest mortgage payment on a $200,000 mortgage is now just $904.80 per month.

Low rates may not last forever.

Click here to see today’s mortgage rates.

One reason why low rates may not last is that, also last week, the Federal Reserve released the minutes from its June 2012 meeting. The Fed appeared more ready to add new market stimulus than Wall Street had expected. The market’s initial reaction was to push mortgage rates higher because new stimulus would encourage risk-taking among traders, and invite inflation.

This week will see the release of a number of key data points for the U.S. economy:

  • Monday: Retail Sales
  • Tuesday: Consumer Price Index
  • Wednesday: Housing Starts
  • Thursday: Existing Home Sales; Initial Jobless Claims

Click here to see today’s mortgage rates.

If any of these reports show better-than-expected results, mortgage rates are expected to rise. In addition, Federal Reserve Chairman Ben Bernanke begins a 2-day congressional testimony beginning Tuesday. The chairman’s words can move mortgage markets.

Mortgage rates remain at historical loans. If you have not yet locked a mortgage rate, talk to a qualified and licensed mortgage loan originator soon.

This is The Week Ahead for Mortgage Rates: July 16, 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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