Houston Mortgage News

Easter weekend has passed and only two short months until the school year ends, that can only mean one thing – It’s home-buying season! From now until Labor Day the words that we will hear over and over, “What kind of mortgage rates do you have?” Everyone always wants the best mortgage rate and the way things are shaping up this home-buying season may coincide with one of the best mortgage rate eras we’ve ever had simultaneously.

Here are some bits and pieces of news that have affected mortgage rates in Houston now and will affect mortgage rates in Houston throughout the hot Houston summer –

Most domestic indicators suggested the economy is still on the recovery path, but that the picture is not as bright as it appeared four or five months ago. At this stage, all newsworthy items create ripples in the market, and that is exactly what happened last week. The market reached a new high on Monday when the ISM Manufacturing Index came in better than expected. But the release of the minutes from the FOMC meeting on Tuesday suggested a strong economic recovery ahead and suggested that the Fed would be less inclined to begin
another quantitative easing (QE3) program. This resulted in a 1 percent decline in stocks. In addition to this, concerns over European debt came up again after an increase in yields of Spain’s debt.

The bottom line with this piece of news is that as we have seen for months as stocks rally bonds sell-off causing mortgage rates to rise in Houston and throughout the state of Texas. On the other hand, when news comes out to have stocks falter there is rush to quality in bonds and mortgage rates decline. With the stock market severely overbought and the recover stalling we should see a rally in bonds that should drive mortgage rates lower this summer.

Another factor driving Houston mortgage rates down is the recent lackluster jobs report. The labor market did not look too strong last week, as only 120,000 payroll jobs were added in the month of March against expectations of 201,000. In addition, the private sector disappointed in jobs creation — as for the month of March only 121,000 private jobs were created versus expectations of 224,000.

We’ve said over and over it takes about 250,000 jobs created per month to drive real unemployment down. Until that happens don’t expect a big increase in Houston mortgage rates.


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