The 1-year ARM responds more directly to movements by the Fed, ... And market chatter has it that the Fed will not only raise rates at the end of this month, but may do so consecutively throughout the rest of the year. |
The average loan-to-value ratio after refinancing is still 70 percent. |
The bond market isn't exactly sure how fast or slow the economy will expand in the long term and thus bond yields have remained remarkable low. Hence, we expect mortgage rates to remain relatively low for the time being, |
The Commerce Department report on housing starts showed a considerable drop in starts in November. However, with December's mortgage rates continuing to dip even further, we expect housing starts will bounce back fairly quickly. |
The consumer price index figures released this morning showed that the run up in oil prices has not been inflationary at the consumer level, much to the relief of mortgage lenders. And price stability in products other than oil have allowed for more money to go toward home buying and home projects. |
The Consumer Price Index released this week showed no decline, suggesting that the possibility of deflation is still low. Housing starts were stronger than expected, as were the leading indicators released today. All of these reports together could indicate the economy is ready to pick up growth. |
The current housing market continues to show a great deal of strength, |
The current uncertainty of corporate governance caused huge transfers of money into more stable and safer assets. Large money managers shifted their investments into bonds, thereby lowering their yields and allowing mortgage rates to follow. |
The decline in mortgage rates was primarily due to a weak employment report for September, which suggested economic growth is still a bit subdued. As a result, we expect mortgage rates will continue to stay quite affordable over the next few months, benefiting future homebuyers, |
The end result translates into higher long-term mortgage rates this week. |
The escalating tensions within the U.N. over the impending resolution on Iraq and dismal economic news this week sent the stock market tumbling and with it went bond and mortgage rates. The high volatility is likely to remain for a while. But since there are no upward pressures at the moment, any sustained rise in rates in highly unlikely. |
The Fed has been very successful in wringing inflation out of the expectations of investors, ... Today's (rate environment) feels very much like the mid-60s. |
The Fed raised rates this week, as was expected, but the market was a little surprised at the Committee's comments, which implied more tightening in the future. That raised the expectation that inflation may be more of a threat than was previously thought, and that kind of thinking promotes upward pressure on mortgage rates like we saw across the board this week. |
The Fed rate cut and Greenspan's recent remarks that the economy has hit a 'soft spot' had a huge impact on financial markets, ... Combined with the anticipation that the U.S. could soon be at war with Iraq, market sentiment turned toward the negative, driving mortgage rates to new lows again. |
The Fed rate cut and Greenspan's recent remarks that the economy has hit a 'soft spot' had a huge impact on financial markets. Combined with the anticipation that the U.S. could soon be at war with Iraq, market sentiment turned toward the negative, driving mortgage rates to new lows again. |