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Mortgage Rate Rally Extends As Housing Demand Slows Down

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Mortgage and Lending with Caliber Home Loans NMLS# 242952

Wow!  Rates are really rallying!!! The stock market's reversal of fortune forced investors to reallocate their funds into risk averse assets like government guaranteed U.S. Treasuries . This sent benchmark yields lower and led mortgage-backed security prices higher which allowed lenders to reprice for the better. Mortgage rates ended the day yesterday, at the newly set 2010 mortgage rate lows.

We also received an economic report on consumer inflation: The Consumer Price Index. The CPI measures price changes on a fixed basket of goods and services that consumers purchase. Inflation is a high ranking enemy of interest rates.   The Federal Reserve has stated over and over that inflation is not a concern today and today's release supported that belief.

Last but not least - The Feds - "The recovery in the housing market appeared to have stalled in recent months despite various forms of government support. Although residential real estate values seemed to be stabilizing and in some areas had reportedly moved higher, housing sales and starts had leveled off in recent  months at depressed levels. Some participants saw the possibility of elevated foreclosures adding to the already very large inventory of vacant homes as posing a downside risk to home prices, thereby limiting the extent of the pickup in residential investment for a while."

Another bad omen for housing! Sadly it's nothing new to most housing professionals. But at least inflation is low. That is a positive for mortgage rates!

For a fast accurate rate quote go to http://www.garrick.biz/forms/rateTracker.html or call me - keep in mind pricing changes daily...even if you have started the process of buying or pre approval, or especially refinancing elsewhere it is good to get a second opinion.

 

Garrick

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