Weekly Mortgage Market Update For February 21, 2010
Fed officials have been talking quite a bit about inflation.
Even though the Consumer Price Index - which measures what americans pay for goods - came in lower that expected and the “core” CPI (when food and energy are removed from it) was negative, inflation talk is still going. Why?
There are other factors to consider and here are three just to name a few:
- Manufacturing Index coming higher than expected from January’s report.
- Business activities picking up and business leaders forecasting better economy in the upcoming months.
- Housing Starts for January came in at the highest levels since July/2009.
Remember...Inflation is the enemy of mortgage bonds and home loan interest rates. All this talk makes the bond market even more volatile.
This was not the best week for mortgage rates as bond prices were not able to improve after falling a little. Rates ended the week worse than where they began.
Looking Forward
The New Home Sales Report and the Existing Home Sales Report are just a couple of reports coming out this week. The Tax Credit is still in effect so we may have some positive news.
As a reminder...Weak economic news usually helps money flow out of Stocks into Bonds. That helps improve home loan rates. Good news will cause the opposite to happen.
Originally posted at MySacramentoMortgage.com
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