Rate Watch
Mortgage Rates finally fall, after 3 week rise
After 3 consecutive weeks on the upswing, mortgage rates finally came down last week. Although, a sluggish week. There were a couple of things that help keep rates in check. First, the lack of data, there just wasn't much going on last week. Second, the stock market performed very poorly and money flowed back into the bond market, which help push bond prices back up. And lastly, but the most interesting, the Chinese government ended their long running policy of subsidizing energy costs. This policy has helped fuel (no pun intended) much of China's economic expansion over the past couple of decades. With the ending of this policy, energy costs in China will move much higher and China's demand for Oil will invariably fall. It was great news for energy consumers across the globe, as the price per barrel of Oil dropped $6 per barrel in one day. Let's hope this trend continues.
This morning, Bankrate.com's overnight average on the 30-year fixed rate mortgage came in at 6.27%, up slightly from last week's 6.30%. Other products followed. The 15-year fixed rate mortgage fell to 5.86%, down from last week's 5.89%. And the 5-year Adjustable Rate Mortgage fell to 5.71%, down from 5.76%.
Unlike, last week, the economic calendar has some big happenings. The biggest event starts Tuesday with the start of the Federal Reserve's FOMC Board meeting. This meeting will last until Wednesday. At that time, the Fed will announce any policy changes and reveal if it has chosen to cut, raise, or keep the same their key interest rate, the Federal Funds rate. It is widely expected that the Fed will choose to keep interest rates the same. If so, it could prove to help push mortgage rates down. The decision would show that the Fed is serious about fighting inflation, and mortgage bond investors are very concerned about the rising inflation rate.
The other big event of the week will be the release of the Personal Consumption Expenditure (PCE) Index. This measure of the average increase in consumer prices is the Federal Reserve’s favorite measure of inflation. If it is shown that inflation is subsiding, then it could have a huge impact on mortgage rates.
Also on the calendar are Tuesday's Consumer Confidence, Wednesday's Durable Goods Report, and New Home Sales report, and the final reading of Gross Domestic Product (GDP) for the first quarter. All of these reports could have an impact on mortgage rates.
After 3 consecutive weeks on the upswing, mortgage rates finally came down last week. Although, a sluggish week. There were a couple of things that help keep rates in check. First, the lack of data, there just wasn't much going on last week. Second, the stock market performed very poorly and money flowed back into the bond market, which help push bond prices back up. And lastly, but the most interesting, the Chinese government ended their long running policy of subsidizing energy costs. This policy has helped fuel (no pun intended) much of China's economic expansion over the past couple of decades. With the ending of this policy, energy costs in China will move much higher and China's demand for Oil will invariably fall. It was great news for energy consumers across the globe, as the price per barrel of Oil dropped $6 per barrel in one day. Let's hope this trend continues.
This morning, Bankrate.com's overnight average on the 30-year fixed rate mortgage came in at 6.27%, up slightly from last week's 6.30%. Other products followed. The 15-year fixed rate mortgage fell to 5.86%, down from last week's 5.89%. And the 5-year Adjustable Rate Mortgage fell to 5.71%, down from 5.76%.
Unlike, last week, the economic calendar has some big happenings. The biggest event starts Tuesday with the start of the Federal Reserve's FOMC Board meeting. This meeting will last until Wednesday. At that time, the Fed will announce any policy changes and reveal if it has chosen to cut, raise, or keep the same their key interest rate, the Federal Funds rate. It is widely expected that the Fed will choose to keep interest rates the same. If so, it could prove to help push mortgage rates down. The decision would show that the Fed is serious about fighting inflation, and mortgage bond investors are very concerned about the rising inflation rate.
The other big event of the week will be the release of the Personal Consumption Expenditure (PCE) Index. This measure of the average increase in consumer prices is the Federal Reserve’s favorite measure of inflation. If it is shown that inflation is subsiding, then it could have a huge impact on mortgage rates.
Also on the calendar are Tuesday's Consumer Confidence, Wednesday's Durable Goods Report, and New Home Sales report, and the final reading of Gross Domestic Product (GDP) for the first quarter. All of these reports could have an impact on mortgage rates.
posted by Vincent Biondillo @ 3:59 PM
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