Mortgage Rate and Market Recap for the Week of October 27th – 31st, 2008
The Fed Cuts
As you may have noticed, the Fed decision was to cut the Fed Funds Rate (FFR) 1/2% to 1% on Wednesday. Like I mentioned last week, Fed cuts often result in higher mortgage rates. Mortgage rates didn’t disappoint. Overall, they closed about .25% higher than the week before.
Notable though, was the comments from the Fed that inflation isn’t a major concern of theirs. With American consumers so concerned about today’s economy, consumer spending has really declined.
New Home Sales Show Increase
Some of the suprising news over the week was the increase in new home sales. The rise was unexpected, but before you get too excited – strong economic news generally means higher interest rates.
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:
- Economic News. (Like the calendar above).
- International News. (major events, pending legislation, war related news, 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!
