Interest rates were quite volatile this past week as they started the week continuing the trend of lower rates but by the end of the week the interest rates were higher then the beginning of the week. It’s quite a surprise that interest rates ended higher last week although it has been very uncommon over the past couple of months. Freddie Mac is reporting that mortgage interest rates have dropped .42%. If you aren’t a math wiz or financial guru then the drop by .42% may mean very little to you. To make it easy it equals a monthly savings of $25.24 per $100,000 borrowed.
The economy continues to sputter and although there are many out there saying it is improving there are just as many or more that will be able to argue that things are continuing to get worse. Last week there were two members of the Federal Reserve consisting of the chairman and the president both voicing their frustrations with the recovery.
The economy is weak enough that Ben Bernanke the Chairman of the Federal Reserve has talked of interest rates staying low through the end of the year. The markets on Wall Street also are showing worries and concerns as the Dow Jones Industrial
Economic weakness tends to promote a low mortgage rate environment as equity markets sell off and investors seek safety of principal. Indeed, the Dow Jones Industrial Average fell for the 6th straight week, its longest losing streak since 2002.
There is not a lot of news this week that is really valuable but there are a few items that Wall Street may take some actions and decisions on that include:
- Tuesday : Producer Price Index, Retail Sales
- Wednesday : Consumer Price Index
- Thursday : Housing Starts
- Friday : Consumer Sentiment
While the number of home sales and the market in general has been very slow and weak, keep in mind that home affordability has never been so high. With the low rates expected through the end of the year perhaps the buying season will extend beyond the summer this year. If you have any questions about what opportunities may be available to you whether you purchase or refinance simply contact a loan officer for a free consultation.