Mortgage Industry Update

Wednesday (Photo credit: teachernz)

WOW! What an exciting week we just had. Last week there were several economic reports that we in the mortgage industry were paying very close attention too, and we were all listening intently as Fed Chairman Bernanke spoke on Wednesday and Thursday afternoon.

I was anxiously awaiting the release the Producer Price Index (PPI), the Consumer Price Index (CPI) and Housing Starts as these reports can have a big effect on mortgage rates. And without getting into the long version with the specifics, the actual numbers were very close to expected and there was little movement in interest rates.

Furthermore, Fed Chair Bernanke reported that after a slow first quarter the economy picked up some speed for the second quarter, even though it’s still not quite up to potential. He predicted the economy would level off for the second half of 2012 and would then pick up speed at the beginning of 2013 and begin performing at its full potential.

All in all, rates today are exactly where they were a week ago. With rates still at historic lows it’s a great time to buy a home!

I’m really excited about this coming week and what it could have in store.

Economically, this week is even busier than last, with six economic reports scheduled to be released, all coming in the second half of the week, and one of them is considered to be of high importance mortgage rates.

I’ll be watching June Existing Home Sales numbers on Wednesday and the Beige Book Report on Wednesday afternoon, and then June New Home sales numbers on Thursday; thought he Beige Book Report can have the biggest impact on interest rates.

If we see weaker than expected numbers, rates could go down a notch, and if we see stronger than expected we could see rates go up. But given that Fed Chair Bernanke’s testimony last week didn’t have any serious warnings or ground breaking news, I expect numbers to be close to expected, and that usually means rates won’t move much.

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