1/29/10 Mortgage Market Week-in-Review
January 31, 2010
What Did Interest Rates Do This Week?
** based on Freddie Mac weekly average survey **
30-yr Fixed - Relatively Unchanged
This Week: 4.98%
Last Week: 4.99%
1yr Ago: 5.10%
15-yr Fixed - Relatively Unchanged
This Week: 4.39%
Last Week: 4.40%
1yr Ago: 4.80%
Jumbo Fixed (Average 30-yr Fixed)
This Week: 5.75%
Last Week: 5.75%
Highlight of This Week's Major Economic Reports
Despite the recent uncertainty surrounding the reappointment of Ben Bernanke as Federal Reserve Chairman, Congress did vote to keep him on for a second term. Atop his list of to do's is to determine how much longer the Fed will continue to support the financial markets. The most prominent program in question is the Fed's purchase of mortgage-backed securities, which has served as a plug that has kept mortgage rates at exceptionally low levels for over a year now. Noting that "economic activity has continued to strengthen and that the deterioration in the labor market is abating," the Fed is still set on ending its purchases of these securities on March 31st. Some fear the consequential rise in interest rates that is expected to follow the end of this program will further hamper a still shaky housing market, but the Fed appears willing to gamble that the economy will be strong enough to get housing back on its feet without any continued intervention.
Speaking of housing, December proved to be less than kind to home sales, with both New Home Sales and Existing Home Sales reporting dreadful figures. This may have been partly due to consumers' holiday focus and the original November expiration of the tax credit. Nevertheless, there is still a silver lining, and that's prices seemed to at least have firmed a bit.
Additionally, we can expect that home sales will rebound once the economy improves, and the first glimpse at last quarter's economic growth estimates was certainly a sight for sore eyes! The economy grew an astounding 5.7% in the 4th quarter of 2009 - far surpassing economists' predictions.
What to Look for Next Week
As the economy continues to expand, job growth will eventually follow, but it may take awhile before we start seeing noticeable improvement in the unemployment situation. For now, we get to find out the latest labor market conditions with the release of January's employment report next Friday.
Short-Term Rate Outlook
Potentially Higher
** based on Freddie Mac weekly average survey **
30-yr Fixed - Relatively Unchanged
This Week: 4.98%
Last Week: 4.99%
1yr Ago: 5.10%
15-yr Fixed - Relatively Unchanged
This Week: 4.39%
Last Week: 4.40%
1yr Ago: 4.80%
Jumbo Fixed (Average 30-yr Fixed)
This Week: 5.75%
Last Week: 5.75%
Highlight of This Week's Major Economic Reports
Despite the recent uncertainty surrounding the reappointment of Ben Bernanke as Federal Reserve Chairman, Congress did vote to keep him on for a second term. Atop his list of to do's is to determine how much longer the Fed will continue to support the financial markets. The most prominent program in question is the Fed's purchase of mortgage-backed securities, which has served as a plug that has kept mortgage rates at exceptionally low levels for over a year now. Noting that "economic activity has continued to strengthen and that the deterioration in the labor market is abating," the Fed is still set on ending its purchases of these securities on March 31st. Some fear the consequential rise in interest rates that is expected to follow the end of this program will further hamper a still shaky housing market, but the Fed appears willing to gamble that the economy will be strong enough to get housing back on its feet without any continued intervention.
Speaking of housing, December proved to be less than kind to home sales, with both New Home Sales and Existing Home Sales reporting dreadful figures. This may have been partly due to consumers' holiday focus and the original November expiration of the tax credit. Nevertheless, there is still a silver lining, and that's prices seemed to at least have firmed a bit.
Additionally, we can expect that home sales will rebound once the economy improves, and the first glimpse at last quarter's economic growth estimates was certainly a sight for sore eyes! The economy grew an astounding 5.7% in the 4th quarter of 2009 - far surpassing economists' predictions.
What to Look for Next Week
As the economy continues to expand, job growth will eventually follow, but it may take awhile before we start seeing noticeable improvement in the unemployment situation. For now, we get to find out the latest labor market conditions with the release of January's employment report next Friday.
Short-Term Rate Outlook
Potentially Higher