News for Prescott AZ - AmericanTowns.com

Monday, January 04, 2010

Mortgage Rates Rise at Year End

Interesting News today form Kathleen Gillis, MBA   She is a Prescott Arizona Mortgage pro that is great to work with.

 

 

The final two weeks of December have not been kind to mortgage rates. Stronger than expected economic data, comments from Fed officials, and a stock market rally all were negative for mortgage markets, and mortgage rates moved higher during the period.

Heading into December, mortgage rates were close to record low levels, but a combination of factors caused them to increase throughout the month. First, an improving economic outlook, which is good news for the country, is negative for mortgage markets because it generally leads to higher inflation. Second, the government already will need to issue an enormous amount of debt to pay for its spending, and it now looks more likely that additional expenditures are on the way for job creation and health care bills. Higher yields are required to attract investors to purchase the extra debt, pushing up yields for competing investments such as mortgage-backed securities (MBS). Finally, the Fed is winding down its $1.25 trillion MBS purchase program, reducing demand for mortgage investments.

With mortgage rates that are still historically low, high levels of affordability, and the homebuyer tax credit, the housing sector outlook for 2010 is for improvement from 2009. According to projections from the Mortgage Bankers Association (MBA), sales of existing homes are expected to increase by more than 10% next year. In addition, housing starts will rebound sharply from extremely low levels, and median home prices will move a little higher. Forecasts from the National Association of Realtors (NAR) and from Fannie Mae are generally consistent with the outlook from the MBA.

 

 

Also Notable:

  • November Existing Home Sales jumped to the highest level since February 2007
  • Weekly Jobless Claims declined to the lowest level since September 2008
  • Geithner said that it's reasonable to expect "positive job growth" starting in spring
  • The Fed purchased $15 billion in agency MBS during the week ending 12/23

 

 

 

 

 

Week Ahead

The biggest economic event next week will be the important Employment report on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, the ISM manufacturing index will be released on Monday. Pending Home Sales, a leading indicator for the housing market, will come out on Tuesday. ISM Services and the minutes from the December 16 Fed meeting will be released on Wednesday. Construction Spending and Factory Orders will round out the schedule. In addition, the Treasury will announce the size of upcoming auctions on Thursday.

Kathleen Gillis, MBA    CNN Mortgage, Inc.    AZ BK #0901814   

 

This is not the opinion of Brad Bergamini, Realty Executives Northern Arizona or any of its affiliates.  This post is for informational purpose only and is not guaranteed and does not render as legal advice.  Buying and selling Real Estate in Arizona or Prescott Arizona is a serious task and should be consulted with personally with Realtor or Real Estate Attorney.  Please visit my website for contact information

http://bradbergamini.com

 

 

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