Mortgage Market Update
by Tom on July 15, 2009
in Market Musings, Market Report, Mortgage Rate Updates
Well, the bond and mortgage markets are taking it on the chin this morning. Why? A couple of things:
- The Consumer Price Index (inflation on the “you and me” level) came in quite tame except if you look at just the core level, then it came in at a pretty healthy amount. Not an overly alarming level, but high enough to appear to say that inflation isn’t dead. Anyone who has read Straight Talk for a while knows that inflation is a bad thing for mortgage rates.
- A manufacturing index came in down but WAY up from the month before. That is leading the market to think that maybe the economy might be starting to bottom and turn around. Good for the stock market but pulling money from the bond market which is bad for mortgage rates.
- Industrial Capacity Utilization (how busy are factories?) came in down but less than expected. Another glimmer that maybe things are getting better?
When you combine the presence of some inflation with a couple of hints that we might be near a bottom in the economy (note – they are “hints” but not facts yet), that has prompted a shift from bond market to the stock market. Therefore the stock market is up and so are mortgage rates.
Recommendation remains to lock all loans. The risk of this continuing is better than the potential for a turn around.
Tom Vanderwell
P.S. Here’s a couple of the rates that I’m quoting today:
$400,000 purchase, owner occupied, 20% down, 30 year fixed, 30 day rate lock, 5.25% with no points or 5.0% with .75 pts.
$200,000 rate and term refi, 30 year fixed, 60 day rate lock, 80% loan to value or less, 5.625% with 0 pts.
$150,000 investment property purchase, 25% down, 30 year fixed, 30 day rate lock, 5.875% with 1 pt.
APRs (and custom rate quotes) available upon request. E-mail me at tvanderwell@straighttalkaboutmortgages.com.
