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Rate Update

Mortgage rates remained at the lowest levels in decades during the short holiday week with very little economic news. The current low mortgage rates can be attributed to a couple of factors. One is that inflation is under control and is expected to remain low for quite a while. Another is that demand for mortgage-backed securities (MBS) is high. When packaged and sold as government guaranteed MBS, mortgages are viewed as safe investments, much like US Treasury securities, and safety has been important to investors in these uncertain times. On another note, President Barack Obama signed a 3-month extension on the closing deadline for first-time homebuyers to receive the tax credit. Potential homeowners currently under contract now have until September 30 to close the deal, instead of the original June 30 deadline. Currently, the 30-Year Fixed is at 4.250% (4.398% APR) and the 15-Year Fixed is at 3.750% (4.012% APR). This week we will have the important monthly inflation reports along with Retail Sales and Consumer Confidence. The Treasury will also auction $69 billion in 3-, 10- and 30-year securities.

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