Seattle Mortgage News For The Week of February 1st

The end of January saw mortgage rates holding fairly steady within a small range throughout the week.  The average for a 30 Year Fixed Conventional loan as reported by Freddie Mac dropped slightly to 4.98% from 4.99% the previous week.  What is somewhat surprising is that the rates held steady amidst a week that had several economic reports that came out with numbers that were more negative than what the market expected. 

• Existing Home Sales = Market Expected 5.9M – Actual was 5.45M
• New Home Sales = Market Expected 366K  – Acutal was 342K
• Durable Goods Orders = Market Expected 2.0% – Actual was .3%

Given those negative reports you’d think the outlook on the economy would be decidely worse and we’d see mortgage rates falling.  Well not so fast as there were some also some positive economic reports that came out.

• Consumer Confidence was up to 55.9 which exceeded the market expectation of 53.5
• Gross Domestic Product was up 5.7% while the market expected 4.7%

Those positive numbers were in the categories considered to be more important and helped to keep the overall Mortgage Backed Securities market fairly stable throughout the week.   The upcoming week has a number of reports although very few of the same impact as those last week EXCEPT for the Employment Report due out on Friday.  This is one of the most important economic reports on a monthly basis and includes numbers on Unemployment, Payrolls and Earnings.  Given the impact this report COULD have on mortgage rates, if I was considering locking in my mortgage rate this week and the cost was right, I’d lean towards locking. 

Most quotes that I was making to clients last week were around 4.75% on a 30 Year Fixed Conventional loan depending on their credit rating and desire to pay origination fees or not.   If you’re looking for a lower rate option and willing to take a risk, 5 Year ARM’s are running as low as 3.75%. I still  expect rates to continue to slowly rise this year as mentioned before in my initial 2010 mortgage outlook post.

 

 

 

Michael Pollock is an Accredited Buyers Representative, member of the Seattle King County Association of Realtors and Licensed Loan Originator in Washington.  He also works with clients in the Tacoma/Pierce County area – visit us at www.tacomapowersearch.com