While Austin mortgage rates climbed in December, they have decreased during the first two weeks of January. A combination of factors was favorable for mortgage markets this week. Low inflation, weaker than expected economic growth data, and strong demand for the Treasury auctions all helped Austin mortgage rates move a little lower.
The final two weeks of December have not been kind to mortgage rates. Stronger than expected economic data, comments from Fed officials, and a stock market rally all were negative for mortgage markets, and mortgage rates moved higher during the period.
With trading volume starting to fall off a cliff, expecting the market to move much in any direction is possible but probably not in the cards. Next week will be worse.
As we look through the forest to find a tree, the positive technical development today was that Trend Intensity turned neutral from bearish. Not huge you say but it’s baby steps, kinda like ‘What about Bob.” The study remains trend ready but with both bears and bulls getting the Rolling Stones treatment (No Satisfaction), expecting any new market moving trend to develop, good or bad, is unlikely soon. Prices now sit in the middle of the range and seem to be quite comfortable, typical of a market that can’t decide which way to go. Daily charts give sellers and edge but that’s 51/49 at best. Expect the market to tread water with spurts of volatility from time to time.
Way behind the curve today as we’ll already entered the second half of the day’s trade. For the most part, the market has been like watching paint dry. Total movement in mortgage backed securities has only be 3/32’s (currently up 1/32nd) while stocks opened strong and have held most of their gains (Dow plus 130).
Our view that risk is back in vogue, noting gold at record highs and stocks up 60%. Systemic risk/asset bubble risk is creeping back into the market as investors are forced into stocks and fixed income spread product. The Fed is on hold for at least another year and they (Fed) will need to see GDP growth of 4% to 5% before they will tap on the brakes (raise interest rates). We’d look for Austin mortgage rates to stay low well into 2010.
October Housing Starts fell 10.6% to 529k units (annualized). Some have blamed the fall on uncertainty over the 8K first time home buyers stimulus while others point to a consumer who is unemployed and over budget.
While daily volatility was high this week, Austin mortgage rates ended just slightly lower than last week. The primary factors influencing Austin mortgage rates were offsetting. The economic growth data released this week was stronger than expected, but inflation remained low. While the first two Treasury auctions produced impressive results, the final one was relatively weak.
There were few major surprises in the economic news this week, and little change in the stock market. While there was a great deal of daily volatility, Austin mortgage rates ended the week nearly unchanged.
“In my view, if policy makers insist on waiting until [...]
