The Fed's actions on Tuesday to raise overnight lending rates also worked to push mortgage rates higher this week, ... Because the Fed's action impacts short-term rates more than long-term, the largest effect was on ARMS, which rose significantly after the Fed announced its raise.
More Quotes from Frank Nothaft:
Plummeting consumer confidence in September led markets to believe that the lack of job growth is wearing on the economy,Frank Nothaft
Gross domestic product numbers surprised everyone today, posting a much larger-than-expected increase and confirming the notion that the economy has finally turned the corner,
Frank Nothaft
Although mortgage rates have risen for the second week running, the long-term figures are still only about 50 basis points higher than they were at the start of the year. This may have slowed the refinance market a little, but refinancing continues to make up about half of all applications for mortgages, according to the Mortgage Bankers Association.
Frank Nothaft
There seems to be some concern in the marketplace that the economic recovery will be slower than expected , lessening the fear of inflation. As a matter of fact, personal income and consumer spending growth for the first quarter were moderate and showed inflation to be well constrained.
Frank Nothaft
With no big economic news to influence the direction of mortgage rates this week, the numbers drifted very slightly upward. We see this trend continuing throughout 2006, with the 30-year fixed rate mortgage ending the year at about 6.3 as the housing market eases back from last year's record setting levels toward a somewhat more normal rate of activity.
Frank Nothaft
That raised the expectation that inflation may be more of a threat than was previously thought, and that kind of thinking promotes upward pressure on mortgage rates like we saw across the board this week.
Frank Nothaft
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