Mortgage Rate and Market Recap for the Week of August 4th – August 10th, 2008
Inflation On The Rise
As I said, Monday’s PCE Index was an extremely important report for the week. Monday’s report brought the largest increase month over month for 27 years. Yea, it seems super rough – I’m not sure it was as bad as everyone made it out to be. Unfortunately my opinion doesn’t impact mortgage rates. Mortgage backed securities do, however. Traders spent the week moving money from bonds (MBS) to stocks.
The Fed Decides to Leave Things Alone
After Tuesday’s Fed Meeting, we found that the Fed has decided to keep things unchanged. The fed sees the concerns of inflation, but feels that it is too early to take any action in hiking the fed funds rate. Some economists think that the Fed will not move the Fed Funds Rate until the 1st or 2nd quarter of 2009. I personally feel (and it’s exactly that, a personal opinion), inflationary figures will continue to rise and the Fed will decide to take action sooner than later.
What Did Those Reports Say?
Each week, I put up an economic calendar of news coming out that following week. Here’s the results from last week:
(Click to Hugisize)
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:
- Economic News. (That’s these calendars).
- International News. (major events, war related, etc).
- 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 would love to help!
