Local mortgage planner John Schutze gives his weekly market update:
“Mortgage rates are down from last week!!!The chance for additional Treasury purchases by the Fed helped mortgage rates improve early this week. Stronger than expected economic growth data trimmed the gains later in the week. The net result was that mortgage rates ended the week a little lower.
As expected, the Fed made no change in the fed funds rate at Tuesday’s meeting. It™s statement was very similar to the last one, but investors focused on one important difference. Fed officials stated that they are “prepared to provide additional accommodation if needed to support the economic recovery.” Investors interpreted this to mean that additional bond purchases by the Fed could take place in coming months. While the Fed is expected to purchase Treasury securities rather than mortgage-backed securities (MBS), increased demand for Treasuries would be favorable mortgage rates. As usual, investors immediately priced in this information, and mortgage rates improved.
The housing data released during the week generally matched expectations. While there are differences in regional performance, overall the housing market is holding steady above the lows reached during the recent financial crisis or improving modestly. August Existing Home Sales in Austin are down 15% from last year but up from a 27% drop in July (hangover from the expiration of the tax credit). Inventories of unsold existing homes is a 7.1 month supply which is arguably a very positive number all things considered.
Current rates:
30 Year Fixed: 4.125 %
15 Year Fixed: 3.75 %
FHA 30 Year: 4.25 %
VA 30 Year: 4.375 %
5 Yr ARM: 3.25 %
Jumbo 30 Year Fixed: 5.375 %
Jumbo 5 Yr ARM: 4.375 %
30 Year Home Equity: 4.5 %
The above rates are based on a $120,000 Loan Amount with a 1% Origination Fee and 720 credit score (660 score for FHA and VA loans). Some programs require slight adjustments for smaller loan amount
John™s team helps Austin area buyers plan their mortgage future. Check out his Austin mortgage blog.
An Austin Realtor is a Central Austin Realtor ®. You can search Austin homes for sale at his website.
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