Mortgage Weekly Update - Last Week in Review - Another week of more of the same
Foster Weeks publishes a weekly mortgage report which is updated every Monday morning....last week, you couldn't watch the financial news for longer than a few minutes without hearing about the "subprime meltdown", talking about a certain type of home loan experiencing heavy rates of default and foreclosure, and what the potential consequences might be on the US economy. Although subprime lending only represents a very small portion of home loans overall, the doom-and-gloom-loving media was loving it, busy forecasting a financial disaster for the economy. While this is a bit overblown, there certainly will be some ramifications, so be sure to read this week's Mortgage Market View below, to know what you should expect, and what you can do now. Overall, the news and hype did worry investors, and both Stocks and Bonds experienced an increase in volatility...but home loan rates ended up very close to where they started for the week.
...The week ahead holds a few real headliner news items, including a new round of housing data to sift through, including Housing Starts and Building Permits on Tuesday, and Existing Home Sales next Friday. But the financial highlight of the week will be the Fed Meeting and resulting Policy Statement. There has been rumors of a Fed Funds Rate cut to help the housing market or to smooth out the subprime home loan problem...but don't believe it. The Fed's main charge is to control inflation, period. And they will only consider cutting rates if the core rate of inflation, as measured by the Personal Consumption Expenditure (PCE) Index, falls below 2% for a few consecutive months. The latest Core PCE was 2.3%, so don't look for Home Equity Lines of Credit or other adjustable home loan rates that are tied to the Fed's movements to be dropping anytime soon... Read more.
- Foster Weeks
posted by SFResidence.com @ 7:14 AM
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