Economic data moved Austin mortgage rates this week. Slower than expected economic growth data and low inflation figures were favorable for the Austin, TX mortgage market. As a result, Austin mortgage rates ended the week lower.
Heading into a Fed meeting next week, the low inflation data released this week means there is little pressure on the Fed to begin raising the fed funds rate. May Core Consumer Price Index (CPI) inflation rose at a 0.9% annual rate, the lowest level in four decades. Usually the major task of Fed officials is to prevent inflation from moving too high, but they are now concerned about the risk that inflation will drop too low. Fed officials are most comfortable when inflation remains in the 1.5% to 2.0% range. This also means that there is little inflationary pressure to push Austin mortgage rates higher. Of course, with expectations set so low, if inflation were to surprisingly increase in coming months, it could cause a large reaction in the Austin mortgage market.
Will the “close by” deadline to receive the Home Buyer Tax Credit be extended? The answer to this question is not known as of this Friday morning. The Senate has approved an amendment to a larger bill to do so, but the larger bill is still being debated and its passage is not certain. Extending the “close by” deadline will benefit qualifying home buyers who are not able to close by June 30, the original deadline. Extending the deadline sooner rather than later would help relieve some anxiety. Right now, people in all phases of the home buying process are working very long hours to close an unusually large number of purchases before the end of the month.