Gas Prices are Also on Their Way Back Down

Mort­gage mar­kets improved again last week on a revised eco­nomic out­look for the U.S. econ­omy, and ongo­ing con­cerns about Greece and its sov­er­eign debt.

Con­form­ing mort­gage rates fell last week and now hover near the all-time lows set last November.

Adjustable-rate mort­gages are espe­cially low.

There were three big sto­ries last week that will carry for­ward into this week.

First, the Fed­eral Open Mar­ket Com­mit­tee voted to leave the Fed Funds Rate unchanged in its cur­rent tar­get range of 0.000–0.250 per­cent. This was expected. How­ever, the Fed revised its growth esti­mates for the U.S. econ­omy lower. This was not expected.

Mort­gage rates dipped on the news.

Sec­ond, Greece moved closer to avoid­ing insol­vency. The nation-state’s par­lia­ment must now pass a pack­age of spend­ing cuts and tax increases to appease Euro­zone lead­ers and the IMF. Without pas­sage, though, bank­ruptcy may be unavoidable.

Wor­ries about Greece’s fate sparked a bond mar­ket flight-to-quality. This, too, helped mort­gage rates ease.

And, lastly, Thurs­day, the U.S. and other mem­bers of the Inter­na­tional Energy Agency chose to release 60 mil­lion bar­rels of oil to the mar­ket over the next month. You’ve likely expe­ri­enced the impact as the gas pump already — gas prices are way down nationwide.

Lower gas prices means fewer infla­tion­ary pres­sures and infla­tion is the enemy of mort­gage rates. Less infla­tion, lower mort­gage rates.

Specifically, What Did Those Reports Say?

Each week, I put up an economic calendar of news coming out that following week.   Here’s the what actually happened with those reports last week:

What Impacts Mortgage Rates?

If you’re looking to purchase or refinance a home, it’s important to know what moves mortgage rates.  There are normally two major things that impact the direction:

1. Economic News.  (Like the calendar above).
2. International News. (major events, pending legislation, war related news, etc).
3. Stock Market. (Money flows from equities (stocks) to bonds when it seeks shelter).

What Are Rates Based On?

It’s been mentioned before, but as a common reminder – mortgage rates are only based on one thing, Mortgage Backed Securities (MBS).  The only way you have access to these is through live bond quotes.

Looking For Mortgage Rates?

If you’re looking for specifically what mortgage rates are doing, I’d be happy to help with a custom rate quote.  Each scenario is different (there are 27 different factors a mortgage rate is determined by).  If you or someone you currently know are looking for a mortgage, I’m here to help!

Information without obligation.  That’s my policy.  If you like what you hear, my team and I would love to help you out with your mortgage!  Our contact information is on the top right hand side of this page!