Rates Improve as Fed Bond Purchases Likely to Continue Through Year End
Mortgage interest rates improved this past week as it appears that the Federal Reserve will continue to purchase Treasuries and Mortgage Backed Securities at their current levels through the end of the year. Tapering is still an option though, depending upon the strength of the new economic data. Markets are also focused on the potential government shutdown on Monday if a continuing resolution is not passed to fund the government. Economic data was mixed.
Economic data stronger than expected included the July FHFA Home Price Index, August Durable Goods Orders, and weekly jobless claims. The four week average of jobless claims fell to its lowest level since June 2007.
Economic data weaker than expected included September Consumer Confidence, August Durable Goods Orders excluding transportation orders, the final look at Q2 GDP, August Pending Home Sales, and the University of Michigan Consumer Sentiment Index.
Also of note, the Treasury auctioned $94 billion in 2 Year Notes, 5 Year Notes, and 7 Year Notes which were met with okay demand.
Wall Street Commentary
The Dow Jones Industrial Average is currently at 15,232, down over 200 points on the week. The crude oil spot price is currently at $103.75 per barrel, down slightly on the week. The Dollar weakened versus the Euro and Yen on the week.
Next week look toward Monday’s Chicago Purchasing Managers Index, Tuesday’s ISM Manufacturing Index, Thursday’s Jobless Claims, and Friday’s employment report for September as potential market moving events.
Currently, a Conventional 30 year fixed rate is hovering in the range of 4.375 % 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.