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Mortgage Update for 10.13.14


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Blog by Doug Ingersoll | October 13th, 2014


From Stuart Crawford at V.I.P. Mortgage Inc.:

"While the US economy continues to show moderate growth, last week investors grew more concerned about the pace of economic growth outside the United States.  As a result, they shifted assets to bonds at the expense of stocks, which helped mortgage rates end the week a little lower.

Europe is still struggling to recover from the financial crisis and is at risk of another recession.  Recent economic data has shown that manufacturing activity in the euro zone has fallen to the lowest level in about one year, while inflation has declined to multi-year lows.  Investors had hoped that these conditions would cause the European Central Bank (ECB) to announce additional monetary stimulus at its meeting on Thursday, but the ECB made no change in policy.  This news was favorable for mortgage rates, since slower economic growth reduces future inflationary pressures.

Following a shortfall last month, the solid Employment report released last week confirmed that the U.S. remains on track for moderate economic growth.  Against a consensus forecast of 215K, the economy added 248K jobs in September, and the figures for prior months were revised higher by 69K.  Both the 3-month and 12-month average job gains are now well above 200K.  The Unemployment Rate declined from 6.1% to 5.9%, which is the lowest level since July 2008.  The strong data caused mortgage rates to reverse some of the improvement seen earlier in the week.

The Mortgage Backed Securities markets are closed today in observance of Columbus Day."

Stuart can be reached at 602.710.8975