Rates on the 30 year benchmark mortgage rose for the sixth week out of the last seven. The rate was up 6 basis points to 6.32% this past week. A year ago the rate sat at 6.17% and it is up from 6.23% over the past four weeks. Overall, rates are up about 0.25% since their bottom in early December due to a run of good economic news. This good news has lead investors to fear that the Fed is going to possibly change their stance when they meet later this week.
Investors have their hopes pinned on a Fed rate cut at some point during 2007. Many had hoped for a cut in the first half of the year, however, the recent run of good news has led experts to put nearly a 0 percent chance of this happening in the first half. In the absence of any bad news on the economy, mortgage rates will likely stay in a trading range from 6 1/4% to probably 6 1/2% over the next few weeks.
For all of 2006, sales of existing homes were down 8.4% which was the largest annual decline since 1989. New home sales ended with two strong months in November and December. The consensus view on housing seems to be that we have reached the bottom and we will have a slow and gradual improvement during 2007.
Atlanta mortgage rates were up to a 9 week high for this past week. After sideways movement from September to November, consumer prices climbed 1/2% in December, affected by higher gasoline prices. However, for 2006 on the whole, consumer prices were up only 2.5% which was the lowest rise in three years. Wholesale prices were up just 1.1% for all of 2006, which was a vast improvement over the 5.4% rise we say in 2005.
The preliminary report on consumer sentiment showed a rise to 98.0 from 91.7 from December to January. This is the best reading we have seen in over three years. It was the result of falling gasoline prices and a better overall view of the economy.
Additionally, unemployment claims dropped to 290,000 last week, and this was the lowest level in nearly a year.
The result of all of this for mortgage rates was a 9 week high. With all of this positive news, it seems unlikely that the Fed will be anxious to cut rates anytime soon. The 30 year fixed mortgage rose 2 basis points this week to 6.26 percent. While we have seen a 9 week rise, it has been a very slow rise from 6.08 percent, so we are up less than 1/4%. The timing is still good for consumers with ARM which are adjusting sometime during 2007 or ARM's that have already adjusted to get into a 30 year fixed rate.
This week, look for updated data on new home and existing home sales to impact rates.
If you have applied for a mortgage lately, you may be hearing from more than just the loan officer that you selected to do your loan. Increasingly, there are more and more companies who are buying mortgage trigger leads. What that means is that when your loan officer pulls your credit, this is flagged by the credit bureaus as someone who is applying for the mortgage. They then turn around and sell your information as a “mortgage lead” to any mortgage company willing to pay for the lead.
Primacy Mortgage believes this is an incredible invasion of your privacy and as a result, we do not ever buy trigger leads. Furthermore, we urge the members of congress to take action to end this very questionable practice. It would seem to most like a major invasion of privacy, however, the credit bureaus have been enabled to continue selling these leads.
What can you do about it? Well, there are two things. First of all you should opt out of all pre-approved credit offers at this site: https://www.optoutprescreen.com. The site is sponsored by the four major credit agencies. Additionally, you can register yourself on the national do not call list here: https://www.donotcall.gov.
You can read more about mortgage trigger leads here: http://www.mortgagenewsdaily.com/912006_Mortgage_Trigger_Leads.asp
