Pleasanton Mortgage Rates Forecast: June 13, 2011

Pleasanton Mortgage Rates Forecast: June 13, 2011

Housing Starts 2009-2011Mortgage markets moved in feverish fashion last week, changing with extreme frequency, and eventually ending slightly worse on the week. Conforming mortgage rates fell to a 6-month low Wednesday but, by Friday, they had retreated higher.

Moving Higher

Last week marked just the second time in 8 weeks that rates in Pleasanton increased. During that span, Freddie Mac reports that mortgage rates have dropped 42 basis points, or 0.42%.

That equates to a monthly savings of $25.24 per $100,000 borrowed.

One reason why mortgage rates have been dropping is that the economy is growing more slowly than projected. In a speech last week, Federal Reserve Chairman Ben Bernanke described the U.S. recovery as “frustratingly slow”. In a separate speech, another Federal Reserve President, William Dudley, categorized the recovery as “subpar”.

Economic weakness tends to promote a low mortgage rate environment as equity markets sell off and investors seek safety of principal. Indeed, the Dow Jones Industrial Average fell for the 6th straight week, its longest losing streak since 2002. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.

Mortgage rates were also helped by ongoing uncertainty in Greece. The nation remains at-risk for default, and that’s spurring a bond market to flight-to-quality which benefits the U.S. mortgage market, too.

The Week Ahead…

This week, mortgage rates may reverse their recent slide. There isn’t much data due for release, but the numbers that will hit the wires have the ability to move markets — especially the inflation-linked figures.

  • Tuesday : Producer Price Index, Retail Sales
  • Wednesday : Consumer Price Index
  • Thursday : Housing Starts
  • Friday : Consumer Sentiment

If you’ve been looking at mortgage rates for a purchase or refinance, now may be a good time to lock. FHA and conforming rates are at their lowest levels in our Pleasanton market since December 2010.

Have a Plan for your Mortgage

If you’re floating a mortgage rate right now, consider locking in. Interest Rates are low. The risks of rates jumping at any given point this week are always there. I love to work with readers that find my information on the Mortgage and Housing Market helpful in your decision making process. As a Mortgage Planner at Vintage Mortgage Group in Pleasanton I am in a unique position to help you capitalize at any point in the market. Contact me below today to help you with your purchase or refinance.


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