Market Insight, Mortgage News, Mortgage Rates

The Week Ahead For Mortgage Rates: December 23, 2013

December 23, 2013 by · Leave a Comment 

What's Ahead For Mortgage Rates This Week- December 23, 2013According to December’s NAHB/Wells Fargo Housing Market Index, home builder confidence rose by four points to a reading of 58; this surpassed the consensus of 56 and November’s reading of 56.

November Housing Starts were released Wednesday and also exceeded expectations and the prior month’s reading. 1.09 million housing starts were reported for November against expectations of 963,000 and October’s reading of 889,000 housing starts.

Building permits issued in November came in at 1.01 million and fell short of October’s reading of 1.04 million permits issued. November’s reading exceeded expectations of 990,000 permits issued.

The week’s big news emerged after the conclusion of the Federal Reserve’s FOMC meeting. The committee announced that it would begin tapering the Fed’s $85 billion purchases of securities. The taper was modest; the Fed will reduce its rate of purchases to $75 billion monthly, with a split of $40 billion in Treasury securities and $35 billion in mortgage-backed securities.

Fed Chairman Ben Bernanke gave his final press conference as Fed chair. He noted that the FOMC was confident that the economy would continue to improve at a moderate rate and that the Fed would continue monitoring economic and financial developments to guide future adjustments in its monthly purchase of securities.

Mortgage rates were expected to rise after news of the Fed’s tapering of its quantitative easing program, as the program was intended to hold down long-term interest rates and mortgage rates.

Mortgage Rates, Jobless Claims Rise

Freddie Mac’s Primary Mortgage Market Survey confirmed expectations of higher mortgage rates. Average mortgage rates ticked upward by five basis points to 4.47 percent for a 30-year fixed rate mortgage; the average rate for a 15-year fixed rate mortgage rose by eight basis points to 3.51 percent.

Discount points for a 30-year mortgage were unchanged at 0.70 percent for a 30-year mortgage and dropped from 0.70 to 0.60 percent for a 15-year fixed rate mortgage. The average rate for a 5/1 adjustable rate mortgage rose from 2.94 percent last to 2.96 percent with discount points unchanged at 0.40 percent.

Weekly Jobless Claims came in at 379,000 and were higher than projections of 338,000 and the prior reading of 369,000 new jobless claims. Although the reading was the highest since March, analysts attributed the higher reading to changes in work schedules during the holidays.

Sales of existing homes slipped to their lowest levels in close to a year. The NAR reported that existing home sales fell from 5.12 million in October to 4.90 million in November.

Projections were set at 5.00 million sales for November, but a shortage of available homes and rising mortgage rates were seen as reasons for fewer sales. The approaching holiday season and cold weather typically contribute to a lull in home sales during the winter months.

What’s Coming Up In The Week Ahead for Mortgage Rates: December 23, 2013.

This week’s scheduled economic news is light due to the Christmas holiday, but Monday’s releases include consumer spending, personal spending and the University of Michigan’s Consumer Sentiment Index.

New Home Sales for November will be released Tuesday. The week’s scheduled news will conclude with Weekly Jobless Reports on Thursday, as no further economic news is scheduled for Friday.

This is The Week Ahead for Mortgage Rates: December 23, 2013.

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QUICK GENERAL RULE OF THUMB WHEN MONITORING 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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