Economic News: The big market moving news this week was the announcement from the Federal Open Market Committee that it will purchase 40 Billion Dollars a month of Agency Paper (Fannie & Freddie Mortgage Bonds) with no expiration date set. This is the much anticipated Quantitative Easing known as QEIII. Additionally, the FED policy of low interest rates is expected to continue through the middle of 2015. This sent the stock market off to the races Thursday and mortgage rates went lower as well. The recent increase in gasoline prices hit both the Producer and Consumer Price Indicies showing moderate inflation pressure. The price of gas also had a lot to do with the rise in Retail Sales. The mood of the Consumer was also positive to end the week with a report of sentiment at 79.2 versus the expected 73.5.
Mortgage Markets: It was a pretty wild week for mortgage rates with the Fed announcement. The 10 Year Note got walloped to end the week and closed trading at 1.871% versus 1.672% last week. Mortgage Backed Securities fared better and interest rates were slightly lower to unchanged from last week.
Next Week’s Reports: Wednesday: Housing Starts, Existing Home Sales Thursday: Jobless Claims, Philadelphia FED Survey
While I do not originate loans I make it a habit to keep abreast of mortgage & market conditions. If you are thinking of purchasing a home the first step is to meet with a mortgage professional. I will gladly provide several top-notch Bay Area advisers for your review if you are in need of a referral.