Texas mortgage rates improve a little the week of February 18

After rising for several weeks, Texas mortgage rates improved a little this week. The news on inflation was not as negative as investors may have feared, and the economic growth data was mixed. The most significant reports on growth, Retail Sales and Industrial Production, both fell short of expectations, which helped Texas mortgage rates.

While food and energy prices have been rising globally, overall inflation levels have generally stayed low. The big monthly US inflation reports released this week revealed that core inflation remained low in January, but that it has moved higher over recent months. January CPI was a tame 1.6% higher than one year ago. Core CPI, which excludes food and energy, was only 1.0% higher than one year ago. During the week, we also received an early sign that inflation may be higher down the road. The Prices Paid component of the Philly Fed index jumped sharply, reflecting that raw material costs rose. The question is whether companies will be able to pass along higher costs to consumers.

The FOMC Minutes from the January 26 Fed meeting were released on Wednesday and contained no major surprises. The minutes revealed that disagreement was growing among Fed officials about the benefits of continuing the quantitative easing program which is scheduled to end in June. However, there was general agreement that the hurdle for altering the program remains very high, and investors continue to expect the Fed to complete the $600 billion in purchases of Treasury securities as originally planned. The Fed raised its forecast for 2011 GDP growth to 3.65% from their prior estimate of 3.30% in November. Perhaps the biggest surprise was that the Fed lowered its forecast for 2011 core PCE inflation levels. With all the recent evidence of rising prices, lower inflation predictions were not expected.

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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