5/21/10 Mortgage Market Week-in-Review
May 24, 2010
What Did Interest Rates Do Last Week?
** based on Freddie Mac weekly average survey **
30-yr Fixed - Lower
Last Week: 4.84%
Previous Week: 4.93%
1yr Ago: 4.82%
15-yr Fixed - Lower
Last Week: 4.24%
Previous Week: 4.40%
1yr Ago: 4.50%
Jumbo Fixed (Average 30-yr Fixed)
Last Week: 5.50%
Previous Week: 5.50%
Highlight of Last Week's Major Economic Reports
With all the panic revolving around Europe's financial crisis, the US has once again become the safe haven towards which investors flock. After the Dow dropped 426 points last week, we saw interest rates tumble to historic lows once again after investors sought out the safety of US Treasuries.
On the positive side, inflation continues to be a non-issue in the US. The Producer Price Index, which tracks costs to manufacturers, declined by 0.1% last month, while the prices consumers pay on the back-end (as tracked via the Consumer Price Index) also dropped 0.1%. As long as the economy continues to struggle to pick up steam on the recovery and inflation remains tame, the Federal Reserve should not have any pressing need to raise short-term rates any time soon.
Speaking of the Fed, the minutes from their last meeting were released, and the overall sentiment was that the economy is still improving. However, while stronger growth is expected in 2011-2012, this could be jeopardized by a still-struggling housing market, persistently high levels of unemployment, and the debt crisis pummeling Europe.
What to Look for This Week
Home Sales will be the only major data coming out next week, so we’ll get to see if the recent dip in mortgage rates has helped continue the housing momentum. Other than this, the stock market (spurred by European issues) will be the primary driver impacting the direction of mortgage rates.
Short-Term Rate Outlook
Relatively Stable
Stay Informed: What's in the News
"Central Texas Adds 2,800 Jobs in April" from Austin Business Journal
http://austin.bizjournals.com/austin/stories/2010/05/17/daily65.html?ed=2010-05-21&ana=e_du_pub
"Austin Home Sales Up 31%, Condos 63%" from Austin Business Journal
http://austin.bizjournals.com/austin/stories/2010/05/17/daily45.html?ed=2010-05-20&ana=e_du_pub
"Austin Top Memorial Day Destination, Priceline Says" from Austin Business Journal
http://austin.bizjournals.com/austin/stories/2010/05/17/daily64.html?ed=2010-05-21&ana=e_du_pub
"Texas Mortgage Delinquencies Drop" from Austin Business Journal
http://austin.bizjournals.com/austin/stories/2010/05/17/daily52.html?ed=2010-05-20&ana=e_du_pub
** based on Freddie Mac weekly average survey **
30-yr Fixed - Lower
Last Week: 4.84%
Previous Week: 4.93%
1yr Ago: 4.82%
15-yr Fixed - Lower
Last Week: 4.24%
Previous Week: 4.40%
1yr Ago: 4.50%
Jumbo Fixed (Average 30-yr Fixed)
Last Week: 5.50%
Previous Week: 5.50%
Highlight of Last Week's Major Economic Reports
With all the panic revolving around Europe's financial crisis, the US has once again become the safe haven towards which investors flock. After the Dow dropped 426 points last week, we saw interest rates tumble to historic lows once again after investors sought out the safety of US Treasuries.
On the positive side, inflation continues to be a non-issue in the US. The Producer Price Index, which tracks costs to manufacturers, declined by 0.1% last month, while the prices consumers pay on the back-end (as tracked via the Consumer Price Index) also dropped 0.1%. As long as the economy continues to struggle to pick up steam on the recovery and inflation remains tame, the Federal Reserve should not have any pressing need to raise short-term rates any time soon.
Speaking of the Fed, the minutes from their last meeting were released, and the overall sentiment was that the economy is still improving. However, while stronger growth is expected in 2011-2012, this could be jeopardized by a still-struggling housing market, persistently high levels of unemployment, and the debt crisis pummeling Europe.
What to Look for This Week
Home Sales will be the only major data coming out next week, so we’ll get to see if the recent dip in mortgage rates has helped continue the housing momentum. Other than this, the stock market (spurred by European issues) will be the primary driver impacting the direction of mortgage rates.
Short-Term Rate Outlook
Relatively Stable
Stay Informed: What's in the News
"Central Texas Adds 2,800 Jobs in April" from Austin Business Journal
http://austin.bizjournals.com/austin/stories/2010/05/17/daily65.html?ed=2010-05-21&ana=e_du_pub
"Austin Home Sales Up 31%, Condos 63%" from Austin Business Journal
http://austin.bizjournals.com/austin/stories/2010/05/17/daily45.html?ed=2010-05-20&ana=e_du_pub
"Austin Top Memorial Day Destination, Priceline Says" from Austin Business Journal
http://austin.bizjournals.com/austin/stories/2010/05/17/daily64.html?ed=2010-05-21&ana=e_du_pub
"Texas Mortgage Delinquencies Drop" from Austin Business Journal
http://austin.bizjournals.com/austin/stories/2010/05/17/daily52.html?ed=2010-05-20&ana=e_du_pub