Florida mortgage markets have enjoyed record low home loan interest rates of late, but signs may be pointing to an increase – if we’re to take anything away from recent economic data.
This past week, Federal Reserve Chairman “Uncle” Ben Bernanke stressed that the Fed will be very vigilant to protect against inflation as the economy begins to pick up speed.
Now, you may be asking: “What does inflation have to do with Florida home loan rates?”
Well, as I’ve said here many times - inflation is the arch-enemy of Bonds and home loan rates, and just the knowledge of it coming has been causing both Bonds and home loan rates to worsen in recent days.
The Fed is already slowing down the rate at which it is purchasing mortgage backed securities, and with the end of their buying in sight - the reduced demand for these Bonds is driving home loan rates higher.
Economic News Items for the Week of October 12, 2009
The Bond market is closed today for Columbus Day, but the Stock market is open, and the week ahead has plenty of market-moving economic reports on menu. Some key reports to watch this week include:
- Wednesday’s Retail Sales Report
- Thursday’s Consumer Price Index Report
- Friday’s Preliminary Consumer Sentiment Index (Very Important)
- Release of the FOMC’s meeting minutes – coming very soon
On Wednesday, the Retail Sales Report will be released. This is the most-timely indicator of broad consumer spending patterns, so the markets will be watching to see if it comes in near expectations. Thursday brings us inflation news when the Consumer Price Index (CPI) is reported. After Bernanke’s comment last week about the Fed protecting against inflation, the markets will be watching this report closely.
On Friday, the Preliminary Consumer Sentiment Index will be reported. This survey is conducted by the University of Michigan and measures consumer attitudes regarding present and future economic conditions. The index rose at the end of September, so the markets will be watching to see if that boost in confidence continued into this month’s preliminary report.
In addition to the important economic reports described above, industry experts and traders will be paying close attention to the release of the Meeting Minutes from the Fed’s most recent Open Market Committee meeting. Once again, any talks about future inflation could move the markets – particularly after Bernanke’s comments last week.
Bottom line: Florida home loan rates are already on the rise, and we won’t likely see these low historic interest rate levels again.
See An Interest Rate You Like? Act On It Before It Goes Away!
Interest rates are still very near historic lows – Abe Lincoln would have been hard pressed to secure a lower interest rate than what we’re seeing now! Fact is, the opportunity today’s low rates present for homebuyers looking to refinance is humongous! Like, Jolly Green Giant Big!
If you and I have not discussed your home loan situation lately, or if you have a friend, family member, neighbor or coworker who needs advice – please contact me. There’s no time to waste.
Remember this. 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 from the chart below, Mortgage Bonds were unable to close above a tough technical ceiling of resistance last week and were ultimately pushed lower, causing home loan rates to rise.
I hope you found this post useful! As always, if you or anyone you know is in need of a local Florida mortgage broker, I’m your guy. Call me at 863-604-3019 or apply online for your Florida mortgage. We’ll keep you posted and let you know when it’s time to pull the trigger!
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