Rates Improve Slightly Despite Expected Fed Tapering
Mortgage interest rates improved slightly this past week despite markets continuing to expect that the Fed will taper its Treasury and Mortgage Backed Securities purchases at the conclusion of its FOMC meeting next week. It appears, though, that the tapering is already priced into current market levels.
Economic data of note included today’s August Retail Sales which were weaker than expected. Retail sales increased 0.3% on expectations that they would increase 0.5%. Excluding automobile sales, retail Sales increased 0.1% on expectations that they would increase 0.3%. The University of Michigan Consumer Sentiment Index was reported at 76.8, its weakest level since April. Markets expected the index to come in at 82.0. The Treasury auctioned $65 billion in 3 Year Notes, 10 Year Notes, and 30 Year Bonds which were met with relatively strong demand.
Also of note, it appears that military action in Syria is less likely at this point as a diplomatic solution is being pursued regarding Syria’s chemical weapons. In Congress, a debate over the budget and debt limit looms.
Wall Street Commentary
The Dow Jones Industrial Average is currently at 15,369, up over 400 points on the week. The crude oil spot price is currently at $107.80, down almost $3 per barrel on the week. The Dollar strengthened versus the Yen and weakened versus the Yen on the week.
Next week look toward Monday’s Industrial Production, Tuesday’s Consumer Price Index (CPI), Wednesday’s FOMC Meeting Announcement and Bernanke Press Conference, and Thursday’s Jobless Claims, Existing Home Sales, and Philadelphia Fed Survey as potential market moving events.
Currently, a Conventional 30 year fixed rate is hovering in the range of 4.625% to 4.75 % with no points.
** Mortgage rates are subject to daily market fluctuations and can change without notice. Mortgage rates are also effected by down payment, occupancy, loan amount, credit score, lock period and property type.