Home Mortgage Rates Remain Low

After last week’s Federal Open Market Committee meeting, Fed Chairman Ben Bernanke noted the improving conditions in our economy, but acknowledged that the housing market continues to remain depressed as new home sales remain low for the month of March. New home sales fell 7.1% in March to 328k units on an annual rate, down from February’s 353k units on an annual rate.

We also saw Bernanke report last week that inflation is higher in the short run due to higher energy costs, but prices are expected to remain moderate in the long run. While rising inflation could prevent home rates from remaining near record best levels, the upcoming Core Personal Consumption Expenditure (Core PCE) report (the Fed’s favorite measure of inflation) will shed light on current inflation levels.

Forecast
On this coming Monday we will see the Personal Income and Spending Data be released in addition to the much anticipated Core PCE report which will reveal the current inflation levels after Ben Bernanke’s comments last week suggested inflation levels will remain in check in the long-term.

The Initial Weekly Jobless Claim report will be coming this Thursday and will be closely watched by investors due to the last few weeks of elevated Jobless Claims. An ongoing trend of weak economic news will cause money to flow out of Stocks and into Bonds, helping bonds and mortgage home loan rates to improve, while strong economic news normally has the reverse result.

The important point to take away from the recent market news reports is that now continues to be an excellent time to purchase or refinance a home as home loan rates continue to remain near historic lows. If we can help answer any questions for you please contact us as we would be glad to help you.