Mortgage news Thursday 4/29
Mortgage News Thursday 4/29 - This is a weekly update on the mortgage market and some insight on not only what but why the mortgage rates do what they do.
Federal Reserve Board chairman Bernanke reiterated the Fed’s commitment to keep short-term interest rates low for some time to come. Though he expressed caution about the recovery, Mr. Bernanke suggested there are few worries about inflation as of yet. The stock markets rose on these words, while Treasury security yields edged higher.
The National Association of Home Builders monthly survey of builder outlooks rose from 15 to 19, indicating a jump in optimism about sales of new homes in the near-term future. And the number of new residential properties whose construction began in March exceeded the number in February by a strong 1.6%.
And in the broader economy, March retail sales were 1.6% higher than those of February (and 7.6% higher than in March, 2009). As a result, analysts felt that consumers were more open to big-ticket purchases than in the recent past. However, though auto sales may have risen, home sales have not, nor have applications for mortgages.
With these economic weathervanes pointing in the right direction, then, and with the imminent expiration of the $8,000 and $6,500 federal homebuyer tax credit, one would have expected the Mortgage Applications Index (see to right) to improve as well. But it hasn’t. Most significantly, the number of applications for new purchase money home loans actually declined in the week ending April 9 by 10.5%.
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