Blog, Market Updates

Austin Mortgage Update – Week Ending 1/9/09

January 9, 2009 by Kevin Wilhelm · Leave a Comment

What Did Interest Rates Do This Week?
** according to Freddie Mac **

30-yr Fixed – Lower
This Week: 5.01% — lowest since 1971
Last Week: 5.10%
1yr Ago: 5.87%

15-yr Fixed – Lower
This Week: 4.62%
Last Week: 4.83%
1yr Ago: 5.43%

5/1 ARM – Lower
This Week: 5.49%
Last Week: 5.57%
1yr Ago: 5.63%

Highlight of This Week’s Major Economic Reports

Despite a recent uptick in Treasury yields, mortgage rates actually fell during the first full week of the New Year. One major catalyst driving this dip is the start of the Fed’s foray in purchasing mortgage-backed securities. The $500 billion budgeted for this shopping spree is helping to increase demand, which in turn has kept rates low.

Stocks also took a hit throughout the week as retailers and other corporations took turns issuing earnings warnings. This then led to a ‘flight to quality’ mad-rush over to the bonds markets, thereby further driving down rates.

And, lastly, there was the much-anticipated Employment Report. We knew it wasn’t going to be pretty. 524,000 jobs lost in December, which brought the final 2008 tally to 2.6 million. The unemployment rate now sits at a level we haven’t seen in 16 years – 7.2%. Despite the gloomy outlook for the job market, most economists do not anticipate the unemployment rate to hit double-digit levels, since the economy (i.e., GDP) is expected to make a comeback (albeit a modest one) in the second half of the year.

What to Look for Next Week

We’ll get to find out just how bad the worst holiday shopping season in years was when the latest Retail Sales figures come out on Wednesday. Then, of course, there are the all-important inflation gauges in the Consumer Price and Producer Price Indexes. Inflation is not expected to be an issue at all; it’s more so seeing if the numbers start to creep into deflationary territory, as many economists fear.

Short-Term Rate Outlook

Fractionally Lower

This update brought to you by

Marie Funston
Senior Mortgage Advisor
Coldwell Banker Mortgage
Tel.: (512) 691-6757

and

Kevin Wilhelm, ABR, GRI, REALTOR®
Coldwell Banker United, Realtors
512-417-3915