Austin Mortgage Rates Move Lower

Tame inflation data, strong demand for the Treasury auctions, and a lack of surprises from the Fed were all positive for Austin mortgage markets, and Austin mortgage rates ended the week lower.

As expected, the Fed held the fed funds rate steady on Wednesday, and its statement contained few changes. The Fed suggested that economic activity is “leveling out”, rather than continuing to decline, and the Fed expects that inflation will remain subdued due to unused capacity in the economy. Of note, the Fed decided not to increase its $300 billion Treasury purchase program, which will end in October. No changes were announced for the $1.25 billion mortgage-backed securities (MBS) purchase program, which is set to conclude at the end of the year. Austin mortgage rates are largely determined by MBS prices, and the added Fed demand for MBS has helped keep Austin mortgage rates low. Investors will soon need to hear what the Fed plans to do with the MBS purchase program. The direction the Fed chooses could have a significant impact on Austin mortgage rates later in the year.

The economic data released during the week was favorable for mortgage rates. The July Consumer Price Index (CPI) inflation data was unchanged from June, and Core CPI, which excludes food and energy, rose at a tame 1.5% annual rate. Current inflation levels are not a cause of concern for investors. July Retail Sales dropped slightly from June. Excluding autos, the results fell well short of expectations.

About Max Leaman Austin Mortgage

GREAT RATES, LOW FEES, CLOSE ON TIME™ ---- 2012 Ranked #1 Austin Residential Mortgage Lender (Austin Business Journal) 2010, 2011 & 2012 Five Star Professional (Texas Monthly) 2009, 2010, 2011, 2012, 2013 PrimeLending Chairman's Circle Award 2009, 2010, 2011, 2012 Scotsman Guide Top Originator (Top 200 Mortgage Professionals in U.S.A.) Better Business Bureau "A+ Rating" National Lender Rankings (Scotsman Guide): Top Purchase Volume (No. 10) Most Loans Closed (No. 32) Top Dollar Volume (No. 88)

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