Guest Post – Tradition Mortgage’s Weekly Update December 14, 2015
Mortgage Rates Slip on Cheap Oil
Mortgage rates are affected by many different market forces. Often it is economic data and its impact on the outlook for inflation. This past week, the biggest influence on mortgage rates came from the drop in the price of oil and its effects on the stock market. Stocks declined, and mortgage rates end the week slightly lower. The price of oil declined during the week to the lowest level in seven years. This is great for consumers, but has mixed effects on financial markets. The drop weighed heavily on energy stocks and concerns spread throughout the broader stock market. Investors sold stocks and bought safer investments like government-backed mortgage-backed securities (MBS). The added demand for MBS pushed mortgage rates lower.
With more cash in their pockets from lower gas prices, consumer spending in other areas showed solid improvement in November after three previous disappointing months. Consumer spending accounts for about 70% of economic output in the U.S., and the retail sales data is a key indicator.
Week Ahead: Factors: The highly anticipated Fed meeting will take place on Wednesday. If the Fed raises the federal funds rate as widely expected, investors will be looking for guidance about the pace of future rate hikes. Before that, the consumer price index (CPI), the most closely watched monthly inflation report, will come out on Tuesday.
Today’s rate snapshot: 30-day lock rates as of 11/02/2015 8:50AM:
30-year Fixed (conforming): 4.00% (4.125%APR*) Same as last week
15-year fixed (conforming): 3.25% (3.375% APR*) Same as last week
7-year ARM (conforming) 3.50% (3.49% APR*) Down .125% from last week
30-year Fixed (jumbo) 4.00% (4.125% APR**) Same as last week
*Based on 70% LTV, primary residence, rate and term refinance and purchase, 175k minimum loan size, 30-day lock. Rates subject to change at any time based on bond market pricing fluctuations. **Minimum loan size for a jumbo loan is $418,000. This information is intended for professional reference only, and not intended for consumer use. Additional qualifications and disclosures apply.
Have a great week!
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Direct 952.252.4488 / Cell 612.716.9999 / Fax 952.252.4489
Tradition Mortgage LLC
NMLS # 286998
4350 Baker Rd Suite 190 / Minnetonka, MN 55343 / www.TraditionWest.com