Voted Best Real Estate Company in SLO County in the 2017 New Times Reader Poll
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Rate Update

Mortgage rates have fallen to the lowest levels in decades, thanks in-part to the economic troubles in Europe. But the real problem appears to be much larger than that. Recent data suggests the US economy is struggling to gain traction without the support of government stimulus programs, evidenced by mortgage purchase applications down 35% from one month ago to a 13-year low upon the April 30th expiration of the federal homebuyer tax credit. Economists are beginning to talk about a “double-dip” recession due to stagnant employment, housing foreclosures, Europe dragging the US economy down, stocks falling, etc. Ben Bernanke said last week that the Unemployment Rate will stay “high for a while”, most recently reported at 9.7% for May. The Fed’s Beige Book report showed signs of improvement, but the housing market still must deal with its “shadow inventory” of short sales and REO properties. Retail Sales, which makes up nearly 70% of total economic activity, unexpectedly fell 1.2% in May, the biggest drop in eight months. Stocks continue to struggle as the Standard & Poor’s 500 Index saw its biggest two-day loss in over a year. During these periods of uncertainty, mortgage markets usually benefit as it’s common for investors to seek a higher level of relatively safer assets, including US treasuries and mortgage-backed securities. Currently, the 30-Year Fixed sits at 4.375% (4.523% APR) and the 15-Year Fixed is at 3.750% (4.012% APR). This week will feature the monthly inflation reports. The Producer Price Index focuses on the increase in prices of “intermediate goods” used by companies to produce finished products. The Consumer Price Index looks at the price change for those finished goods which are sold to consumers.

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