Mortgage Application and Mortgage Rate Update

It is a big week for all interest-rate products including mortgage product rates with the Federal Reserve meeting this week. You’ll really want to check the forward guidance of the Federal Reserve to see what may be ahead for mortgage rates.

The Mortgage Bankers Association reported on last week’s applications and mortgage applications were up almost 8%. Refis shot up 10% though mortgage refinancing are still down year of year by 22%. Mortgage  applications to purchase a home rose 5 percent from the previous week. Mortgage purchases are down 10 percent on year. The refinance share of mortgage activity increased to 57 percent of total applications, the highest level since February, while the adjustable-rate mortgage share of activity increased to 7.6 percent. If you are going to be in a home less than 7 years an adjustable-rate mortgage is a great option right now. You will get a much lower rate and save in monthly mortgage payments

Mortgage Rates – there just is no volatility, which is fine with many capital markets folks out there. As a proxy for the bond market, look at what the riskless 10-yr T-note has done recently at the end of every day: Friday 2.61%, Monday 2.59%, and yesterday was 2.59%. The Producer Price Index number didn’t move rates much yesterday. Today brought us the Consumer Price Index, down -.2%, core rate unchanged. We’ll also have the NAHB Housing Market Index.

But more importantly, today brings us the Federal Open Market Committee meeting announcement with its policy decisions and brief comments on the FOMC’s view of the economy and how FOMC members voted. The mainstream press certainly believes that this has the potential to move interest rates, especially if the Fed changes the wording by even the slightest measure.

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