Tag: Mortgage

Weekly Economic Summary – Feb 29, 2012

There was good news on Friday as Consumer Sentiment rose to 75.3, which is the best level since February of 2011. However, this news was tempered by the rise in oil prices.

On the one hand, high oil prices can be detrimental to the fragile U.S. economy, as consumers have to put more of their discretionary dollars into their gas tanks.  High oil prices are also inflationary as the added shipping and material costs apply upward price pressures on producer or wholesale goods. The upward prices either have to be absorbed by the producer, thus hurting profits and the ability to expand or hire; or the added costs get passed onto the consumer.

The silver lining is that the dampening effect on economic growth produces a sluggish economic environment in which bonds (including mortgage bonds, to which home loan rates are tied) thrive. This is an important topic to continue watching in the weeks and months ahead.

Last week, investors and central bankers came to an agreement to provide Greece with 130 billion Euros ($172 Billion) in financial aid. This will help the country fund itself through March and into the future, as long as it institutes economic reform, austerity measures and meets deficit targets.

Between some of the overseas uncertainty being lifted, a lower unemployment rate, and better than expected economic reports, home loan rates have struggled to improve beyond levels seen over the past two weeks.

Mortgage Rates in an Uptrend

Mortgage rates continued to trend higher this week, according to Freddie Mac, which reported this week that the average rate on a 30-year fixed-rate loan was 5.03%, up from 5% a week earlier and from an all-time low of 4.87% in the week ending Oct 8th.

Rates on shorter-term fixed-rate mortgages and adjustable-rate loans also rose. For 15-year fixed-rate loans, often used by borrowers seeking to pay off their mortgages faster, the rate this week averaged 4.46% with 0.6% of the balance paid in lender fees and points, up from 4.43% with similar upfront costs last week. For the full year, 30-year fixed rates have averaged just below 5% thanks to intervention by the government, triggering a refinancing boom. Seven of every 10 mortgages this year have been refinancings.

This means that you still have a great opportunity to refinance your current home or even look for depressed properties which could present a great opportunity to buy something that will definitely be worth a lot more in a few years.

As always, I am available to help you look for a new home or to refinance your current home. To check out my listings, click here or you can Contact me.