No Bull Agent
Information in this post is provided by Greg Wickstrand, Home Loan Consultant for HomeServices Lending. He is a guest blogger who provides us information from a lender’s perspective. For additional posts by Greg, please visit his BLOG.
What’s Ahead for Mortgage Rates this Week: October 18, 2010
By: Greg Wickstrand
Mortgage markets worsened last week in back-and-forth trading, pushing conforming mortgage rates higher on the week.
Despite the uptick, however, Freddie Mac reports that rates still managed to make new, all-time lows for the third week in a row. The benchmark 30-year fixed rate mortgage is now down 1.02% since April 2010.
The United States is experiencing a Refi Boom.
As compared to 6 months ago, a new, $200,000 home loan costs $124 less per month in principal + interest.
This week, monthly payments may fall some more. It all depends on data.
Early in the week, housing data takes center stage. The National Association of Home Builders releases its Housing Market Index this morning, and, Tuesday, the government prints September’s Housing Starts figures. Both reports figure to influence the bond market.
Strong readings should lead mortgage rates higher; weak ones should lead them lower. Economists expect weakness.
That said, the biggest story of the week — and the one with the best chance of changing rates — could stem from the Federal Reserve.
Federal Reserve officials, including Chairman Ben Bernanke, have observed the recent U.S. economy and have openly discussed the use of “non-conventional means” to spur it forward. As the rhetoric increases, it’s widely believed that the Fed will act soon, and that the central bank’s plan will include new commitments to U.S. Treasury debt, and, possibly, to mortgage-backed bonds.
Speculation of the Fed’s next move has sparked mortgage bond demand which, in turn, has helped drive down mortgage rates. An official Fed announcement could push rates lower still.
For now, though, mortgage rates are as low as they’ve been in history. Rate shoppers have two choices. (1) Lock in a today’s low rates, or (2) Wait and hope that rates fall further. Ultimately, rates may fall, but once they start rising, they’ll likely rise quickly.
It’s a gamble you may not wish to take. Read Greg’s original post
Look for future posts at www.NoBullAgent.com every Monday on issues to watch for in the mortgage market from local lenders in the San Diego area. When choosing a lender, we suggest you talk with a few to make sure you find a representative and company that works for you. Having a strong relationship with your lender, especially in this market, can be crucial to a successful home buying experience.