Market Insight, Mortgage Rates, The Economy

The Week Ahead for Mortgage Rates: July 23, 2012

July 23, 2012 by · 1 Comment 

3D Spanish Flag by hronos7 | iStockphoto.comMortgage markets improved last week on expectations for new Federal Reserve stimulus, plus ongoing concerns about the European Union’s future.

Mortgage-backed bonds climbed to new all-time highs, which helped conforming mortgage rates drop to new all-time lows.

The average 30-year fixed-rate mortgage rate is now 3.53% nationwide, according to government mortgage-backer Freddie Mac’s weekly mortgage rate survey. The 3.53% rate is available to mortgage applicants willing to pay 0.7 discount points plus a full set of closing costs where 1 discount point is equal to 1 percent of your loan size.

Click here to see today’s mortgage rates.

The 15-year fixed-rate mortgage rate dropped last week, too, falling to 2.83% nationwide, on average.

Even as mortgage rates in Valparaiso Indiana drop, however, rate shoppers should be wary of a potential rate reversal. This is because July’s rapid drop in mortgage rates has been primarily fueled by market speculation.

First, with employment data lagging, inflation pressures low, and slower-than-expected economic growth, Wall Street now believes that the Federal Reserve will launch its third round of quantitative easing next week, a move that would likely include large-scale mortgage bond purchases.

Click here to see today’s mortgage rates.

New, Fed-led demand for mortgage bonds would lead mortgage rates lower for homeowners and rate shoppers throughout Indiana.

Second, investors are preparing for a potential sovereign debt default in Spain, the Eurozone’s fourth largest economy. The Greek economy, by contrast, which faces similar struggles, is 5 times smaller than Spain’s. A Spain default, too, would likely lead U.S. mortgage rates lower.

That said, if neither event comes to pass (if the Fed passes no new stimulus and Spain receives an ample-sized bailout) mortgage rates would be expected to rise as Wall Street re-adjusts its expectations for the future.

Click here to see today’s mortgage rates.

The change would happen quickly, too.

This week, markets will continue to take their cues from the Fed and the Eurozone, but with an eye toward U.S. housing data.

The housing market is linked to economic growth so strong results may lead mortgage rates higher. The June New Home Sales report is released Wednesday; the June Pending Home Sales Index is released Thursday.

This is The Week Ahead for Mortgage Rates: July 23, 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!

Related Posts Plugin for WordPress, Blogger...
Be Sociable, Share!

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!

More Posts - Website

Follow Me:
TwitterFacebookLinkedInPinterest

  • What Is Your Home Worth in Northwest Indiana and the suburbs of Chicago Illinois?

Comments

One Response to “The Week Ahead for Mortgage Rates: July 23, 2012”

Trackbacks

Check out what others are saying about this post...
  1. […] James K Barath is a Certified Mortgage Planning Specialist®, Certified FICO® Professional, qualified liability advisor 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!Source: welcomehomenwi.com […]



Speak Your Mind

WelcomeHomeNWI.com