Although mortgage note rates are unchanged the associated closing costs are slightly less compared to my last ‘rate update’.
There’s a lot to touch on this morning as we head back into the swing of things. First, recapping Fed Chairman Ben Bernanke’s much anticipated speech on Friday he fell short of explicitly announcing specifics for a 3rd round of quantitative easing (QE3) but most analysts interpreted his comments to mean the Fed would act. The only question now is “when?”. The next monetary policy decision is due out September 12th.
Whether or not the Fed acts at their next opportunity is largely dependent the economic data from now until then. Earlier today two data points disappointed. A closely watched survey of manufacturing activity in the US showed ongoing contraction. In a separate report released by the Commerce Department construction spending also contracted to the lowest level in 13 months. The all-important jobs report is due out Friday. If you’ll recall last months reading showed more job creation than was expected (helping to push mortgage rates higher). We’ll talk more about this report in Thursday’s ‘rate update’.
Now it’s time to talk about Europe. Moody’s announced that they have put the EU’s triple-A rating on a negative outlook because of the ongoing debt crisis. ECB President Mario Draghi came out over the weekend and hinted that they may begin to buy government notes, with maturities 3 years or less, when they announce their next monetary policy meeting this Thursday. A high court in Germany is scheduled to rule next week on whether or not the ECB can purchase longer-dated debt.
Mortgage rates are the closest they’ve been to all-time low levels since the beginning of August so still believe locking in is a good plan.
Current Outlook: locking