If you are keeping an eye on the housing market and interest rates, here's this week's word on the street (kindly taken from Mortgage Matters courtesy of Bluegrass Mortgage.) If you'd like to get this free weekly update, just email me at GwenMathews@remax.net and I can forward it on to you!
"Recent reports suggest that housing sales may be rebounding. New home sales rose in three of four months through November, and housing starts increased by 4.5% to a seasonally adjusted 1.642 million annual rate in December. Meanwhile, the National Association of Home Builders/Wells Fargo index of homebuilder sentiment rose to 35 this month from a revised 33 in December, the highest it has been since July.
Unfortunately, the housing market isn’t likely to receive much help from the Federal Reserve over the near future. While underlying inflation pressures have softened from mid-2006, the moderation likely isn't pronounced enough to convince Fed officials that price pressures are no longer a threat, suggesting that steady interest rates are the most likely path, at least through the first half of 2007.
Steady rates are also likely to apply to the mortgage markets. This week’s economic data releases are unlikely to move credit rates. Energy prices, having dropped precipitously over the past three weeks, are also unlikely to fall much further this week. Given current expectations, odds favor mortgage rates holding steady; possibly swinging a basis point or two in either direction."
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