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Rate Update

Mortgage rates reached their fifth record low in six weeks after mostly disappointing data cast more doubt on the economic recovery and increased investor demand in safer investments like mortgage-backed securities. Housing news started the week on a more positive note. New Home Sales rose 24% in June from the month prior to an annual pace of 330,000, but still the second-lowest rate going back to 1963 after May’s 267,000 pace. The S&P/Case-Shiller Home Price Index increased 4.6%, the biggest year-over-year gain since 2006. Thirteen of the 20 cities showed a year-over-year increase, led by an 18% gain in San Francisco and a 12% increase in San Diego. Even these positive signs couldn’t help Consumer Confidence, which fell to the lowest level since February. Later in the week, the Fed’s Beige Book report painted a picture of slow economic growth in most regions. The big blow came on Friday, when we learned that Gross Domestic Product grew at a 2.4% annual rate during the 2nd quarter of 2010, which was below the long-term average of about 3.0% per year. Currently the 30-Year Fixed is at 4.125% (4.273% APR) and the 15-Year Fixed is at 3.750% (3.890 % APR). Next week will be influenced by the monthly employment report, including the all-important Unemployment Rate. We will also see manufacturing data and Pending Home Sales numbers.

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile