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Rate Update

Mortgage rates ended the week roughly unchanged after a busy economic news week that included a Fed meeting, employment data and the extension and expansion of the home buyer tax credit. As expected, the Fed kept the fed funds rate unchanged at between zero and 0.250%. More importantly, the Fed made few changes in its policy statement, noting that “economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” The statement noted that low inflationary pressures and high unemployment rates reduce the need to raise rates, however, many economists took these as key indicators for future rate hikes. Accordingly, the national Unemployment Rate moved up to 10.2% from 9.8% in September, a new 26-year high. On Friday, President Obama extended the $8,000 first time home buyer tax credit to contracts that close by June 30, 2010. The bill also includes a $6,500 tax credit for home buyers who have previously owned a home for five years. Currently, the 30 Year Fixed sits at 4.625% (4.804% APR) and the 15 Year Fixed is at 4.250% (4.557% APR). Next week is light for economic data, with most eyes on the $81 billion Treasury auctions.

Written by Keith Byrd - Go to Keith's Website/Profile