Short term we say “go on, take the money and run”. Longer term, our bias is for a double dip recession of sorts and one more chance to refinance.
After several weeks of focus on Fed actions and events in foreign markets, domestic economic data was the primary influence on mortgage markets this week. Weaker than expected results from the data helped Austin mortgage rates, which ended the week lower.
Today's Austin mortgage rates: the market trades well but your risk reward is starting to dwindle. Given the stiff resistance overhead, best to use the improved mortgage levels. Take advantage.
The big question for home buyers and sellers today is: "Where are Austin home prices headed?" People want to know if now is a good time to buy or sell, or if they should wait.
Technically, the rally we’ve seen the past couple of days has improved the charts, turning the trend to neutral from bearish. The key here is neutral not bullish, telling us that continued upside (better mortgage pricing) will be a challenge.
Good time to take advantage of better mortgage pricing. Our next hurdle will be the removal of MBS purchases by the Fed and the elimination of the 8K tax credit. Time will tell.
These days, most people are trying to control their expenses a little more tightly. Often they don't realize how much they're paying to live in their homes. So let's take a look at that home budget and see if we can't do a better job of staying on top of the costs.
If our work (and that of others ) is correct, we would expect a larger bearish move (more selling/worsening mortgage pricing) in the days ahead. To avoid another leg down, we need to close below 3.74% on the 10 year note (end of day close). Best to keep both hands on the wheel.
Builders are jumping on the recovery bandwagon, as January Housing Starts beat consensus estimates, heading UP 2.8% to an annual rate of 591,000 units. Single-family starts are now 35.6% up from their low a year ago. Total new building permits dropped a tad in January, but single-family permits were up 0.4% for the month and UP 48.2% from a year ago.
The spike in Austin mortgage rates and worsening prices will be worked into the system until we find a new MBS buyer/buyers to replace Uncle Sam. That part of this Quantitative Easing process will end soon (end of March). That said, the street is being overwhelmed with mortgage paper by originators, servicers, and portfolio types that make this their business.
