Austin Mortgage Rates. Week of 12-14-09.
Austin mortgage rates ended last week approximately where they began. There was a slight worsening to rates on Tuesday when the Producer Price Index (PPI) was released and showed signs of inflation; luckily, Austin mortgage rates lowered to their lower levels later in the week.
While we're enjoying historically low rates for now (see Historical Rate Trend to the right), this won't last very 
much longer. As I've announced in previous posts, the Fed will be ending its purchase of mortgage-backed securities (MBS) by March 31, 2010. Why is this important? The end to this program will increase Austin mortgage rates. Why? Well, mortgage rates have been kept artificially low this past year by the Fed's purchase of MBS. To date, the Fed has purchased $1.087 TRILLION in MBS, leaving only $163 billion left to purchase. This averages out to $11.5 billion of purchases a week through March 2010. That's a lot less than even lastest week's purchase of $16 billion. Get where I'm going with this?
If you're looking to buy or refinance, NOW is the time to get moving as Austin mortgage rates won't stay this low for long! Contact me if you'd like a rate quote, or need a referral to an Austin real estate agent.
OK, now that we got the bad news out of the way, how about some good news? Housing Starts and Building Permit reports for November were released last week, showing signs of improvement in the housing sector.
Forecast for the Week
Tuesday will be a busy day -- Existing and New Home Sales for November are due out, and so is Gross Domestic Product. If you're on the fence about locking your interest rate, keep in mind you could see some volatility on Tuesday. Wednesday's Core Personal Consumption Expenditure, and Personal Income Report are also important as they'll give us a gage on inflation. This is especially important to watch after last week's PPI report came in higher than expected. And why is inflation important to monitor? Well, other than the obvious affect it has on your cost of living, it also directly affects Austin mortgage rates. As I've mentioned in previous posts, inflation is the arch-enemy of mortgage rates -- as inflation goes up, so do mortgage rates.
Remember, generally speaking, better than expected economic news causes rates to increase, and visa versa.
Interested in semi-frequent updates on Austin mortgage rates, real estate news and commentary? Contact me or Follow me on Twitter!
______
Nicole Lahti is a Loan Officer in Austin, Texas. Contact Nicole at nicole@nicolelahti.com, or 512-507-8312.
Austin Mortgage Rates. Week of 12-14-09.
Comments(3)