Economic Update for Jan. 20

Thank you Nancy Grieves of Fairfield Mortgage for this report:

Rate Update

The news from Europe has been mostly negative over the last week.  Economic growth in Germany has been slower than expected.  Negotiations on restructuring Greek debt also have not progressed as planned.  S&P is downgrading the debt of several European countries, including France.  Lastly, the European Central Bank (ECB) has given no indication that it will provide relief to the troubled countries.  As a result of all of this turmoil, investors shifted funds to relatively safer investments, including US mortgage-backed securities (MBS), which has helped mortgage rates move lower.  However, we already know that Congress is imposing new fees on Fannie Mae and Freddie Mac later this spring that are going to cause mortgage rates to bump up as much as .25% over the weeks ahead.  Anyone in the market to lock a mortgage rate should do it as soon as possible.

 

Conforming

Non-Conforming

FHA

VA

Loan Amount

< $417,000

> $417,000

< $346,250

< $417,000

30 Year Fixed

3.875%

4.750%

3.750%

3.750%

15 Year Fixed

3.375%

4.250%

3.500%

3.500%

10 Year ARM

3.375%

4.000%

7 Year ARM

3.000%

 3.250%

3.250%

3.750%

5 Year ARM

2.750%

  3.000%

3.000%

3.250%

The above rates are for purchase loans for a primary residence and are intended to give you an overall idea of how rates are changing from week to week. Other factors such as credit score, down payment, and number of days the rate is locked all contribute to the exact rate, which is subject to change at any time and without notification. The Conforming rates above apply to purchase loan sizes $150,000 - $417,000 and carry zero discount points. Rates for lower loan amounts are slightly higher. Lower rates are also available for all programs with discount points.  Qualification is subject to credit and property approval and other restrictions may apply. 

Looking Ahead

The most significant economic data due out this week are the monthly inflation reports.  The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Wednesday.  The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday.  CPI looks at the price change for those finished goods which are sold to consumers.  In addition, Industrial Production, an important indicator of economic growth, will come out on Wednesday.  Housing Starts will be released on Thursday, and Existing Home Sales will come out on Friday.  Philly Fed and Empire State round out a very busy week.

 

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