Market Insight, Mortgage News, Mortgage Rates

The Week Ahead for Mortgage Rates: March 18, 2013

March 18, 2013 by · Leave a Comment 

Good News Headline by LilliDay | iStockphoto.comLast week’s positive employment reports were good news for the economy, which typically causes mortgage rates to rise, but Northwest Indiana mortgage rates ended the week lower.

As of Thursday, Freddie Mac reports the average mortgage rate for a 30-year fixed rate mortgage was 3.63 percent with borrowers paying their closing costs and 0.8 percent in discount points.

The average mortgage rate for a 15 year loan was 2.79 percent with borrowers paying their own closing costs and 0.8 percent in discount points.

Click here to see today’s mortgage rates.

Strong Retail Sales Show Consumer Confidence Improving

In other economic news, retail sales for February surpassed Wall Street expectations and grew by 1.1 percent against predictions of 0.5 percent and January’s reading of 0.1 percent.

Retail sales account for 70 percent of the U.S. economy and growing retail sales are a strong indicator of economic recovery, which generally causes mortgage rates to rise as bond prices including Mortgage Backed Securities fall.

Click here to see today’s mortgage rates.

With this strength in the retail sector, it may be a good time to consider locking interest rates for purchase and refinance transactions.

Results of Treasury auctions held Tuesday, Wednesday and Thursday were mixed.

Tuesday’s auction of 3-year notes saw average demand, Wednesday’s auction of 10-year notes was strong, and Thursday’s auction of 30-year bonds drew a weak response.

Click here to see today’s mortgage rates.

Financial Reporting Strong Across Multiple Indices

The Producer’s Price Index (PPI) for February met expectations at 0.7 percent and exceeded January’s level of 0.2 percent.

The Consumer Price Index (CPI) for February came in at 0.7 percent and exceeded expectations of 0.5 percent and January’s reading of 0.0 percent.

The Core CPI, which excludes food and energy sectors, demonstrates the impact of high fuel prices on the CPI with its lower numbers. The Core CPI for February is 2.0 percent higher than for February 2012.

Click here to see today’s mortgage rates.

Upcoming Federal Reserve Meeting May Bring Interest Rate Changes

The Federal Reserve is not likely to modify its bond purchase program until the inflation rate reaches 2.5 percent.

Next week, the Federal Reserve will meet on Wednesday; investors will be waiting to see how the Fed responds to recent positive economic news in terms of potential changes to its bond purchase program, which is helping to keep mortgage rates lower.

As the deadline of March 27 for funding the Federal government approaches, investors will be following legislative talks to see how or if funding will be approved by the deadline.

This is The Week Ahead for Mortgage Rates: March 18, 2013.

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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