Market Comment
Mortgage bond prices finished the week higher which put downward pressure on rates. Rates were negative the beginning of the week tied to the 7 billion euro Greek bridge loan. Rates recovered the remainder of the week tied to stock weakness. The FHFA Housing Price Index rose 0.4% versus the expected 0.3% increase. Existing home sales were also higher than expected. Leading Economic Indicators rose 0.6% versus the expected 0.2% increase. Weekly jobless claims were 255K versus the expected 278K. Continuing claims were 2207K versus the expected 2212K. Mortgage interest rates finished the week better by about 1/8 to 1/4 of a discount point.
Higher Rates Mortgage rates have generally risen from their recent lows but remain very favorable. The march to higher rates came amid continued warnings from Fed officials of possible Fed rate hikes starting in September. Many signs show the US economy is heading in the right direction. Unemployment is low and housing prices have risen. A basic economic concept is rates will rise when the economy is doing well. However, these are unusual times for sure. The future is murky at best and where rates are going is unknown. We do know rates have risen recently and are likely to be volatile into the future. Now is a great time to take advantage of rates near historic lows and reduce the uncertainty of a future purchase or refinance.
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