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.
he Pending Home Sales Index recovered from its November slump, increasing 1.0% in December, putting it 10.9% over its level of a year ago. National Association of Realtors chief economist Lawrence Yun sees "...a broad improvement over year-ago levels. December activity was the fifth-highest monthly tally in two years." The slump was attributed to the rush before November to grab the tax credit set to expire at the end of that month.
Austin mortgage rates - Many experts are expecting Austin mortgage rates rates to jump a half a point or more the Fed's mortgage backed securities (MBS) purchase program wraps up at the end of March. Take a look HERE to see how historically low Austin mortgage rates are today. It looks like waiting to get Austin mortgage financing could be dangerous to one’s financial health!
The Fed statement essentially followed the expected script, demand was strong for the Treasury auctions, and much of the economic data released during the week was stronger than expected. The net effect was a small increase in mortgage rates during the week.
While the economic data released this week had little impact, mortgage rates were heavily influenced by two big stories. One was an announcement that China will take steps to slow its economic growth and the other was President Obama's proposed new restrictions on the activities of financial institutions.
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.
Over the last few weeks, many economists have been raising their forecasts for economic growth in 2010. The economic data released this week generally did not support this outlook, however, producing some daily volatility. As a result of the weaker than expected data, mortgage rates ended the week a little lower.
What will the effect on mortgage rates be? Given that the market has build in a positive jobs bias, anything that is 0 to 50K in jobs growth will not create a strong selloff. The bias will be for worsening pricing but not substantially so. This is because the market has already sold off in anticipation.
What needs to happen to solidify a recovery is an expansion or long term investment, consumer spending, and lowering the unemployment rate. If not, we could see another economic dip. If the Fed steps in too quickly to raise rates, given my last statement, we could see a repeat of what happened in 1937 when the Roosevelt administration prematurely bumps rates.
