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Mortgage Rates Drop to Record Low:
30 year fixed mortgage rates dropped to their lowest levels in 39 years according to a new survey released by Freddie Mac, the second largest mortgage finance company.
Interest rates on 15 year fixed rates and hybrid adjustable rate mortgage rates reached fresh lows as well. While record low rates and high housing affordability helped the housing market gain ground over the last year, the sector is struggling since the popular home buyer tax credit expired on April 30th.
According to a Freddie Mac survey, the average 30 year fixed rate for conventional (non-FHA and VA) mortgages averaged 4.69 percent for the week ended June 24th and is the lowest since Freddie Mac started the survey in April 1971. Still, Freddie Mac's data is at least a week old before they publish it and it has been another week since then. Rates do vary depending on credit, debt ratios, down payment, area of the country, property type, points paid and many more factors.
GDP, Economy Grow at Slower Pace in 1st Quarter:
U.S. economic growth was slower than previously estimated in the first quarter of 2010. In its final estimate, the Commerce Department said the Gross Domestic Product (GDP) expanded at a 2.7% annual rate instead of the 3% pace it reported last month.
Although the growth pace was below market expectations it still marked three straight quarters of of expansion as our economy digs out of its most brutal downturn since the 1930s.
The Federal Reserve left their key interest rates unchanged this week and struck a cautious note on the economy and said that the recovery was "preceding" and that the economy is not expected to to fall back into a recession. Fears of a "double-dip" recession is one of the factors that have kept mortgage rates so low.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained last week which caused 30 year fixed rates to decrease for both government and conventional loans. Rate declined on the heals of a a slow down in existing and new home sales and a downward revision in our GDP.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
|
Date |
ET |
Release |
For |
|
28-Jun |
8:30 |
Personal Income |
May |
|
28-Jun |
8:30 |
Personal Spending |
May |
|
28-Jun |
8:30 |
PCE Prices |
May |
|
29-Jun |
9:00 |
Case-Shiller 20-city Index |
Apr |
|
29-Jun |
10:00 |
Consumer Confidence |
Jun |
|
30-Jun |
8:15 |
ADP Employment Change |
Jun |
|
30-Jun |
9:45 |
Chicago PMI |
Jun |
|
30-Jun |
10:30 |
Crude Inventories |
26-Jun |
|
1-Jul |
8:30 |
Continuing Claims |
19-Jun |
|
1-Jul |
8:30 |
Initial Claims |
26-Jun |
|
1-Jul |
10:00 |
Construction Spending |
May |
|
1-Jul |
10:00 |
ISM Index |
Jun |
|
1-Jul |
10:00 |
Pending Home Sales |
May |
|
1-Jul |
14:00 |
Auto Sales |
Jun |
|
1-Jul |
14:00 |
Truck Sales |
Jun |
|
2-Jul |
8:30 |
Nonfarm Payrolls |
Jun |
|
2-Jul |
8:30 |
Unemployment Rate |
Jun |
|
2-Jul |
8:30 |
Hourly Earnings |
Jun |
|
2-Jul |
8:30 |
Average Workweek |
Jun |
|
2-Jul |
10:00 |
Factory Orders |
May |
