Market Insight, Mortgage News, Mortgage Rates

The Week Ahead for Mortgage Rates: May 6, 2013

What's Ahead For Mortgage Rates This Week May 6 2013Mortgage rates fell last week and approached or reached record low levels during the middle of the week.

According to Freddie Mac, the average rate for a 30-year fixed rate mortgage (FRM) fell from 3.40 percent to 3.35 percent. Average rates for a 15-year FRM moved from 2.61percent to 2.56 percent.

Discount points for last week’s mortgage rates ranged from 0.7percent for 30 and 15 year FRM loans.

Click here to see today’s mortgage rates.

Rock-bottom mortgage rates can offset the impact of rising home prices and helps keep home affordability at an all time high.

Last week’s economic news provided further indications of economic recovery, with housing related reports contributing to overall confidence in a stronger economy. Highlights of last week’s news include:

Monday: Pending home sales moved up to 1.50 percent in March from February’s -1.07 percent. This reading also surpassed Wall Street’s forecast of 0.90 percent for March.

Click here to see today’s mortgage rates.

Tuesday: The Case-Shiller Home Price Index for February reported that the national average home price had increased by 9.3 percent year-over-year between February 2012 and February 2013. By comparison, the average national home price between January 2012 and January 2013 increased by 8.1 percent year-over-year. Rising home prices are contributing to the economic recovery, but in some areas demand for homes exceeds supply, which also contributes to rising home prices.

Wednesday: The Federal Open Market Committee (FOMC) issued its scheduled statement after its meeting concluded. Committee members noted signs of an improving economy and cited housing markets as a leading contributor to the recovery. The FOMC statement also indicated that economic conditions were not sufficiently improved for the FOMC to change or cease the Federal Reserve’s quantitative easing policy. The Fed’s goal for its current quantitative easing program is keeping long-term interest rates including mortgage rates low.

Thursday: The weekly Jobless Claims Report brought better-than-expected news with new jobless claims coming in at 324,000, less than the expected reading of 345,000 new jobless claims and also higher than the previous report’s reading of 342,000 new jobless claims.

Click here to see today’s mortgage rates.

Friday: The Bureau of Labor Statistics issued its monthly “Jobs Report,” which consists of the Non-farm Payrolls Report and the national Unemployment Rate. Again new jobs added exceeded expectations for April with 165,000 jobs added against expectations of 135,000 new jobs added. April’s reading also surpassed the March reading of 138,000 new jobs.

The unemployment rate dropped to 7.5 percent as compared to a consensus of 7.6 percent. Last month’s unemployment reading was 7.6 percent.

To put this reading in perspective, the FOMC has targeted an unemployment rate of 6.5 percent as a benchmark for adjusting its current policies including quantitative easing.

Click here to see today’s mortgage rates.

What To Look For This Week

This week’s economic events include latest Jobless Claims report on Thursday. It will be interesting to see if this week’s reading will be lower than last week’s reading of 324,000 new jobless claims.

On Friday, the Federal Budget will be released. This could influence financial markets depending on what programs and services are scheduled to be cut or reduced.

This is The Week Ahead for Mortgage Rates: May 6, 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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