After Peaking In July, U.S. Mortgage Rates Prepped To Decline For The Third Straight Week

U.S. mortgage rates expected to drop for third consecutive week this week

Mortgage rates improved for the second straight calendar week last week.

On comments from Federal Reserve Chairman Ben Bernanke and weaker-than-expected economic data, Fannie Mae and Ginnie Mae mortgage bonds both improved, sending conforming and FHA mortgage rates lower, respectively.

VA mortgage rates dropped, too.

Mortgage rates have not dropped through two consecutive weeks since 3 months ago.

Click to get today's reputable mortgage rates.

Freddie Mac : 30-Year Fixed Rate Mortgage Drops

According to Freddie Mac's weekly survey of 125 banks nationwide, the average 30-year fixed rate mortgage fell 0.14 percentage points to 4.37% last week. The rate is available to borrowers with "prime" credit willing to pay 0.7 discount points at the time of closing.

The change in rates marked the second-largest weekly improvement in 100 weeks.

Meanwhile, Federal Reserve Chairman Ben Bernanke was a major force behind the drop.

In a two-day, semi-annual testimony before Congress, the Fed Chairman repeatedly told lawmakers that the Federal Reserve was unready to "taper" QE3, the stimulus program through which mortgage rates are held low artificially.

Concerns that the Fed would soon end QE3 have played a role in rising mortgage rates since May.

Via QE3, the Federal Reserve purchases $40 billion in mortgage-backed bonds monthly. The excess demand keeps bond prices high and mortgage rates low. The Fed believes low mortgage rates spurs investment in housing and job creation, both of which support U.S. economic growth.

Rising rates, the Fed Chairman told Congress, could threaten this recovery. As a result, Wall Street now thinks the Fed will work to keep mortgage rates down for the foreseeable future, a move which will help today's home buyers and refinancing households.

Lower mortgage rates promote low payments.

Also last week, mortgage rates were aided by weaker-than-expected economic data. Retail Sales grew only half-as-much as expected last month and, absent auto sales, failed to increase at all. Retail Sales are a measure of consumer spending -- the largest component of the U.S. economy.

U.S. Housing Starts failed to meet expectations as well.

News like this can help mortgage rates drop. Last week, rates improved by 0.125 percentage point, at least.

Click to get today's reputable mortgage rates.

Mortgage rates and markets change constantly. Stay 100% current by taking The Mortgage Reports by email each day. Click here to get free email alerts, or subscribe to the RSS feed in your browser.

 

Will Mortgage Rates Fall 3 Weeks In A Row?

Since peaking earlier this month, mortgage rates have been in decline. Comments from Federal Reserve members along with soft economic data have allayed some of Wall Street's fears.

Rates may drop again this week. Here's a look at the calendar ahead :

  • Monday : Existing Home Sales
  • Tuesday : FHFA Home Price Index
  • Wednesday : New Home Sales
  • Thursday : Jobless Claims
  • Friday : Consumer Sentiment

Weaker-than-expected results should lead mortgage rates down. Stronger-than-expected results would have the opposite effect.

In addition to this week's data, there are several U.S. Treasury auctions slated for the latter part of the week. Strong demand for U.S. Treasuries can spillover to mortgage-bond markets, leading mortgage rates lower overall.

There are no Federal Reserve members scheduled to speak this week.

Today's Live Mortgage Rates

Mortgage rates reached a near two-year high this month. Since that date, rates have been on decline, the result of soft data and Fed-speak. If you've been waiting to lock a mortgage rate, today could be you day.

Take a look at today's real-time mortgage rates. They're available online without charge or obligation. See what today's rates can do for your budget.

Click for today's live mortgage rates.

About the Author

Dan Green (NMLS #227607) is an active loan officer with Waterstone Mortgage. You can also connect with Dan on Twitter and on Google+.

 

Copyright The Mortgage Reports, LLC 2004-2013

http://themortgagereports.com/13227/after-peaking-in-july-u-s-mortgage-rates-prepped-to-decline-for-the-third-straight-week