Rate Update for July 16, 2008
Mortgages rates are slightly higher this morning following worse than expected inflation data.
The Labor Department reported that the Consumer Price Index (CPI) soared by 5% on a year-over-year basis. This increase to consumer prices is the largest since May of 1991.
If you’ll remember back to yesterday’s rate update the PPI showed an increase of over 9% on a year-over-year basis which was the largest increase since 1981!
This double whammy of worse than expected inflation does not bode well for mortgage rates. For a detailed explanation as to why inflation causes mortgage rates to rise please view this link.
We are shifting our outlook to a locking stance in the near-term.
I also wanted to plug the article I wrote on my blog yesterday evening about Fannie Mae & Freddie Mac. Many of us have heard of these companies and may have a vague understanding of their role in the mortgage industry. This article is designed to help you gain a very clear understanding of their role & importance. To view click this link.