Given that mortgage rates aren't expected to move to much in either direction any time soon, we fully expect the housing market will continue to thrive well into the foreseeable future.
Our January forecast calls for a gradual rise in long-term rates throughout 2006, ending the year at about 6.5 percent for the 30-year fixed-rate mortgage, while relative rate differences with adjustable-rate mortgages will narrow.
Although this past month's dramatic rise in mortgage rates is consistent with an economic recovery, it will take more than one month of strong employment gains to verify this recovery is sustainable.
And speculation that the Federal Reserve may soon take a break in raising short-term rates reduces upward pressure on long- and short-term interest rates.
News like that is good news for keeping long-term fixed-rate mortgage rates low since those are more sensitive to inflationary expectations.
However, as mortgage rates begin to trend upward we expect the rate of house price appreciation to begin to slow to perhaps seven or eight percent nationally this year.
Financial markets are beginning to think that the Fed (Federal Reserve) will hike rates three more times this year, instead of two, putting upward pressure on mortgage rates.
Continued reaction to last week's Federal Reserve Committee statements about the threat of deflation has triggered a rally in the bond market, driving long-term yields to the lowest level since 1958,
Lack of uncertainty around the Iraq conflict caused bond market yields to reverse their downward spiral of recent weeks and mortgage rates followed in tandem. But there are other uncertainties about the length of the conflict and its impact on the economy that will influence mortgage rates in the weeks to come, so this rise in rates may be only temporary.
We may see a market reaction to the release of September employment numbers due out tomorrow. It could potentially alter the momentum of mortgage rate change in the near future.
The recent rise in the Consumer Price Index spooked the financial market, pushing interest rates a little higher this week, ... The decline in housing starts, however, mitigated concern that the economy is growing to fast and led to confidence that the Fed's actions are having the desired results.
There is no doubt that low mortgage rates have been the driver of this phenomenal housing market.
Although mortgage rates have risen in the last two weeks, they are still below last year's annual average of about 7 percent and well below 2000's average of 8 percent, ... The current rising rates will dull the edge of the refinancing market, but there remain homeowners who have put off refinancing for one reason or another who may now rush to their lender to take advantage of current rates.
Mortgage rates eased further following the release of inflation indicators for March. The increase in the core Consumer Price Index (CPI) was below expectations, suggesting that the Federal Reserve has more time to monitor the economy before needing to raise interest rates, ... This should keep mortgage rates low and affordable to many families.
Looking ahead into the spring home buying season, we don't expect mortgage rates to rise too much or too quickly in the near term. As a result, housing activity should stay on track for a strong 2005.
Long-term interest rates were little changed headed into Fed Chairman Greenspan's testimonies to Congress this week,
Mortgage rates slipped this week on news that job creation in March came out much lower than had been expected,
Our outlook for the housing industry continues to be that mortgage rates will remain affordable for the rest of the year at least, keeping the industry alive and well into the foreseeable future.
Treasury rates continued to drop this week to 45-year lows in anticipation that the Fed may cut rates given the continuous weakness in the economy and the absence of any inflationary pressures.
give the market better insight into whether the underlying core of inflation has picked up.
The bond market isn't exactly sure how fast or slow the economy will expand in the long term and thus bond yields have remained remarkable low. Hence, we expect mortgage rates to remain relatively low for the time being,
There continues to be no sign of inflation on the horizon and, as a matter of fact, core inflation is at a generational low.
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,
These numbers suggest that the Fed will remain restrained in its practice of raising short term rates, which may be an indication the Fed doesn't see inflation to be as great a threat as the markets previously had thought it would be.
Mortgage rates are in a holding pattern right now as the country tries to smooth out the knots in the economy. Low rates are a real boost to an already thriving housing market, ... Over the last few months, the number of mortgage applications for home purchase has averaged near record levels...which suggests no immediate slowdown in housing anytime soon.
Declines in work productivity coupled with accelerating labor costs increase the threat of inflation down the road.
Mortgage rates will likely continue at or below current levels in the coming weeks since we continue to see no change in inflation. In fact, today's release of the Producer Price Index showed the economy is growing with little sign of an inflation pick-up, which should calm some jitters.
Until the market gets a better read of how the economy performed at the end of last year and how the Fed interprets that information, interest rates will likely remain calm, ... And it should get that read when fourth-quarter Gross Domestic Product (GDP) is released tomorrow.
Mortgage rates eased even further this week in response to a setback in economic growth during June and possibly July,
Over the last couple of years, we've seen many markets with strong home value appreciation. They're up at a considerable pace in many markets across the country, particularly from New England all the way down to Washington, D. C., ... Home values are up in D. C., for example, by over 10 percent over the past year. That means families have built up home equity.
Although the economy in the final quarter of 2002 looks to be weaker than the third quarter, the housing sector still radiates vitality and vigor. We continue to see new records being set, both in the low cost of mortgages and the volume of business carried out this year.
The market was disappointed on the news of lower consumer confidence and lower orders for durable goods,
The vast majority of homeowners who have fixed-rate mortgages probably won't be affected at all.
Low new home sales figures released yesterday support the idea that the Fed's actions to keep inflation under control are finally having the desired effect.
There's no way we can sustain double-digit price appreciation year after year it just can't happen. We're going to see a return back toward the normal pace.
The consumer price index figures released this morning showed that the run up in oil prices has not been inflationary at the consumer level, much to the relief of mortgage lenders. And price stability in products other than oil have allowed for more money to go toward home buying and home projects.
Mortgage rates have been under 7 percent for the past eight weeks. During that time, mortgage applications for home purchases have continued to reach historically high levels, keeping home sales moving at a vibrant pace.
The average loan-to-value ratio after refinancing is still 70 percent.
Interest rates for 30-year fixed-rate mortgages currently are below the monthly averages set in November and December of 2005.
Low mortgage rates and strong house appreciation boosted new and existing home sales as well as refinance activity (in 2001), leading to what was surely a record-breaking year for housing, ... Coming into the new year, there are some signs that the recession may have already run its course but no indications that inflation looms on the horizon. Thus mortgage rates remained almost unchanged this week.
Slower economic growth this quarter and little or no inflation worries allowed rates to drift downward these last few weeks to the benefit of homebuyers,
Mortgage rates have fallen enough over the last few months that families who refinanced in 2001 are now able to do so again, ... Given the current low rates and the robust level of housing construction it appears the housing industry will continue to flourish well into the summer.
Although we anticipate a moderation in the housing sector at some future point, with the economy picking up steam and mortgage rates still low by historical standards, the housing market will remain buoyant for at least the rest of the year.
We expect mortgage rates to gradually rise throughout the year. A stronger labor market, coupled with moderation in house price growth, means our outlook for overall housing conditions remains upbeat.
Despite strong signs of economic growth, the financial markets were nonplussed, leaving mortgage rates to hover around the same affordable level for yet another week,
One reason why homeowners may be willing to increase the mortgage rate on their first-lien mortgage is because interest rates on most home-equity lines of credit have been pushed up again as the Fed increased short-term interest rates in January and March, which in turn pushed up the prime rate.
Concern over weaker consumer confidence and industrial production outweighed the pick-up in retail sales and business inventories causing interest rates to decline even further this week. Adding to the decline was a flight-to-quality in the bond market from nervous investors worried about falling stock prices and the possibility of war in the Middle East.
This is a good sign that housing activity, although slowing from record levels set in the past few years, will continue to remain healthy this year.
The Fed's acknowledgement of weakness in the economy and a flight to quality in the bond market caused fixed-rate mortgage rates to slide further. And low mortgage rates certainly help offset rising home values, keeping houses affordable for a larger pool of homebuyers.
The Producer Price Index for April, released today, showed a considerably larger decline than had been expected, reaffirming market concerns about the state of the economy. However, the Consumer Price Index for April that will come out tomorrow will give us a much more comprehensive picture of what is actually happening.
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