What’s Ahead For Dublin, CA Mortgage Rates This Week : April 11, 2011

What’s Ahead For Dublin, CA Mortgage Rates This Week : April 11, 2011

Inflation squeezes mortgage ratesMortgage markets worsened last week as energy costs remained high, and jobs data looked strong. The safe haven buying that characterized the March mortgage market has subsided.

it’s driving mortgage rates across Dublin and California higher.

Home Affordability

Conforming and FHA mortgage rates rolled back 8 weeks worth of improvements last week and are now back to mid-February levels. The rise in rates is hurting refinance activity and home affordability.

The biggest story from last week figures to carry forward into this one — the Federal Reserve’s take on inflation.

In the minutes from its March meeting, the FOMC was shown to have discussed the possibility of raising the Fed Funds Rate ahead of schedule, and to be watching near-inflation closely. Both developments are in response to a growing economy with rising price pressures.

Mortgage rate shoppers should take note.

Inflations affect on interest rates

Inflation is a mortgage-rate killer. When inflation is present in the economy, all things equal, mortgage rates rise. Sometimes by a lot. And, usually, just the expectation of inflation is all it takes to make mortgage rates jump.

That’s what we saw last week.

This week, keep a close watch on new inflation-related data set for release. This includes Tuesday’s Retail Sales data, Wednesday’s Producer Price Index, and Thursday’s Consumer Price Index. Each release can potentially move mortgage rates although, if recent trends are an indication, expect for rates to rise.

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.

As you can see in the chart below, Bonds and home loan rates worsened through the week due to a variety of factors. I’ll be watching closely this week to see if they are able to change direction.

 

Mortgage rates in Dublin and across California  remain historically low. If you’re shopping for a mortgage, consider locking as soon as you can.

As a trusted advisor at Vintage Mortgage group of Pleasanton I would be happy to meet and discuss with you your purchase or refinance goals. Message me below and we can set up a time to meet.

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