From Stuart Crawford at V.I.P. Mortgage:
We have experienced a nice downward ride in mortgage rates over the last week, which has been much needed. Mortgage backed securities gained nearly 100 basis points last week, and caused rates to move to their lowest levels since June 20th!
There was a lot of economic data released last week, and the majority of the reports came in very close to market expectations. Remember, it typically takes a significant deviation from what the market has already priced into rates, for the economic data to really move mortgage rates. As a result of very little deviation from “speculation to reality”, last week’s economic releases kept rates fairly neutral.
The major improvements last week stemmed from the looming government shut down fears as our fiscal year ends TODAY at midnight! The looming shut down has also helped keep rates in line today, and we are nearly un-changed from Friday’s close.
The long term view of a government shutdown can impact rates negatively , as investors will demand higher rates from the U.S. to borrow money, but on the short term, a shutdown will put a damper on our economic growth, and that’s why mortgage backed securities are currently improving.
This could be a very volatile week for rates as we have the always anticipated jobs numbers and unemployment rate towards the end of the week, and the obvious government shut down uncertainty. I will have a close eye on the markets to protect our clients.
Stuart can be reached at 602.710.8975
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