Refinace Rates Week in Review
For all the market volatility this past week, refinance rates were little changed on the whole. This makes sense as the 10-Year Treasury Yield ended the week at a break-even.
As we know, inflation and housing prices play a huge role, not only for refinance rates, but for the economy in general. We experienced a few bright spots in these areas this week. The dollar gained, oil prices dropped, and June pending home sales went up unexpectedly.
The assumption that the Fed is more inclined to raise interest rates helped drive some dollar buying ahead of Tuesday's FOMC meeting. As it so happened, the FOMC elected to leave the fed funds rate unchanged at 2.00%. A continued stronger dollar will help with inflation in a large way.
Crude oil prices dropped 7.9% for the week at Friday's settlement to $115.20 per barrel. They are now down 22% from the high they hit July. No need to mention the importance of oil prices to inflation.
The National Association of Realtors said its Pending Home Sales Index, which is based on contracts signed in June, was up 5.3 percent to 89.0 from a downwardly revised 84.5 in May. The pickup in June signings sharply contrasted with forecasts by economists polled by Reuters who had expected home sales contract signings to decline 1 percent. The realtors said the improvement in contract signings "appears to be broadening" and expressed hope that housing legislation signed into law last month will further encourage buyers.
One month's worth of pending home sales is not enough to provide a trend, but the numbers are a welcome change. A stabilization or reversal in housing numbers will have the biggest immediate positive impact on the economy and mortgage refinance rates. We'll have to keep an eye on next month's numbers and hope for the best.
Will this week's positive signs for inflation and housing signal a potential comeback for the economy and real estate? I doubt it, but always remember that perception breeds reality. The more positive signals reported, the better for the economy. Everyone likes to get in on the bottom floor and nothing better than a trickling of key positive econmic reports to get the pot stirring. When investors and home buyers feel like the train may have left the station, the action begins.
May the Mortgage Rates be with You!
Refinance Tool Box
As we know, inflation and housing prices play a huge role, not only for refinance rates, but for the economy in general. We experienced a few bright spots in these areas this week. The dollar gained, oil prices dropped, and June pending home sales went up unexpectedly.
The assumption that the Fed is more inclined to raise interest rates helped drive some dollar buying ahead of Tuesday's FOMC meeting. As it so happened, the FOMC elected to leave the fed funds rate unchanged at 2.00%. A continued stronger dollar will help with inflation in a large way.
Crude oil prices dropped 7.9% for the week at Friday's settlement to $115.20 per barrel. They are now down 22% from the high they hit July. No need to mention the importance of oil prices to inflation.
The National Association of Realtors said its Pending Home Sales Index, which is based on contracts signed in June, was up 5.3 percent to 89.0 from a downwardly revised 84.5 in May. The pickup in June signings sharply contrasted with forecasts by economists polled by Reuters who had expected home sales contract signings to decline 1 percent. The realtors said the improvement in contract signings "appears to be broadening" and expressed hope that housing legislation signed into law last month will further encourage buyers.
One month's worth of pending home sales is not enough to provide a trend, but the numbers are a welcome change. A stabilization or reversal in housing numbers will have the biggest immediate positive impact on the economy and mortgage refinance rates. We'll have to keep an eye on next month's numbers and hope for the best.
Will this week's positive signs for inflation and housing signal a potential comeback for the economy and real estate? I doubt it, but always remember that perception breeds reality. The more positive signals reported, the better for the economy. Everyone likes to get in on the bottom floor and nothing better than a trickling of key positive econmic reports to get the pot stirring. When investors and home buyers feel like the train may have left the station, the action begins.
May the Mortgage Rates be with You!
Refinance Tool Box
Labels: business, finance, money, mortgage rates, refinance
posted by Jim Bisnett at
9:27 AM
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