Market Insight, Mortgage News, Mortgage Rates

The Week Ahead for Mortgage Rates: October 15, 2012

October 15, 2012 by · Leave a Comment 

Freddie Mac mortgage ratesMortgage markets improved slightly last week. With a plethora of new U.S. economic data due for release, investors turned their collective attention to the Europe, China, and the Middle East.

U.S. mortgage rates fell slightly in the holiday-shortened week.

The combination of civil protests, economic slowdowns, and growing political tensions caused investors to dump risky assets in favor of the relative safety provided by U.S. mortgage bonds.

Click here to see today’s mortgage rates.

According to Freddie Mac, the average conforming 30-year fixed rate mortgage is now 3.39% nationwide for borrowers willing to pay 0.7 discount points plus a full set of closing costs. 0.7 discount points is a one-time closing cost equal to 0.7 percent of the borrowed loan size.

A bank’s charge of 0.7 discount points on a $100,000 mortgage would cost $700 to the borrower.

Freddie Mac also reported the average conforming 15-year fixed-rate mortgage rate at 2.70% nationwide with an accompanying 0.6 discount points plus closing costs. Loans with zero discount points carry a higher mortgage rate average.

Click here to see today’s mortgage rates.

This week, data returns to Wall Street as a series of housing reports are slated for release, in addition to inflationary reports such Tuesday’s Consumer Price Index (CPI).

The week begins with Retail Sales, released at 8:30 AM ET Monday. On a strong figure, mortgage rates in Northwest Indiana are expected to climb.

This is because Retail Sales data is closely tied to consumer spending and consumer spending accounts for more than two-thirds of the U.S. economy. A growing economy tends to pull mortgage rates higher.

Click here to see today’s mortgage rates.

Tuesday’s Consumer Price Index (CPI) may do the same.

Inflation erodes the value of a mortgage bond so when inflation pressures grow, demand for mortgage bonds fall which, in turn, causes mortgage rates to rise. If CPI is higher-than-expected, mortgage rates will likely rise.

Then, there’s a flurry of housing data. The Housing Market Index (Tuesday), Housing Starts (Wednesday) and Existing Home Sales (Friday) all hit this week. Strength in housing may lead mortgage rates higher, harming home affordability for today’s home buyers.

This is The Week Ahead for Mortgage Rates: October 15, 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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