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Rate Update

Weak economic data and continued low inflation numbers moved mortgage rates a little lower last week. Manufacturing in the US contracted 0.4% in June, the most in a year. Retail Sales fell in June for a second straight month. The disappointing 0.5% decrease followed a 1.1% drop in May. The Fed, along with many other investors, revised their forecast for economic growth lower for the second half of the year. US consumers echoed that sentiment as Consumer Confidence fell in July to the lowest level since August 2009. Meanwhile, the Consumer and Producer Price Indices continued to show that inflation is not a concern in the short term. Core CPI increased at a very low 0.9% annual rate. The stalled economic recovery and low inflationary pressure has made investors willing to purchase safer assets such as mortgage-backed securities (MBS) at relatively low yields, keeping interest rates at historic lows. 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’s data will focus mainly on housing data, including Housing Starts and Existing Home Sales.

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