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Rate Update

Mortgage rates fell slightly last week, driven in part by two significant, but temporary factors.  Geopolitical turmoil in the Mid-East continues to foster demand for US Treasuries, which indirectly benefits demand in the mortgage-backed securities (MBS) market.  In addition, some of the improvement was driven by those who were cutting their losses on the bet that rates were going higher.  We’ll have to wait to find out if the generally positive trends will continue. 

Economic data released last week was also generally positive. US Retail Sales rose in January for the seventh consecutive month, but the increase was the smallest since June. Sales were up only 0.3% last month, just half of what economists had predicted, following a 0.5% increase in December. Production at US factories climbed in January for a fifth consecutive month. Housing Starts were up 14.6%, but Building Permits were down 10.4%. The Producer Price Index for January was up 0.8% and Core PPI was up 0.5%, the biggest jump since 2008. These increase in prices, however, were not passed through to the consumer… yet. The Consumer Price Index was up 0.5% and Core CPI was up 0.2%. 

Currently, the 30 Year Fixed is 4.750% (4.880% APR) and the 15 Year Fixed is 3.875% (4.101% APR). News is relatively light this week with New Home Sales later this week. The markets are closed today for President’s Day.

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