Weak Employment data and increased expectations for Fed monetary easing were favorable for Austin mortgage rates this week. Investors have priced in a high likelihood of additional Treasury security purchases by the Fed, which would increase demand for mortgage-backed securities (MBS). As a result, Austin mortgage rates declined to a new record low.
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.
After several weeks of strong performance, it was a tough week for mortgage markets. Stronger than expected economic data and an improved economic outlook from the Fed increased concerns about future inflationary pressures. Rising inflation expectations result in higher yields, and mortgage rates increased during the week.