Texas Mortgage Rate Update 8/07/2008
Texas mortgage rates have moved slightly lower today. Dallas, Houston, Austin, San Antonio, and College Station interest rates are just slightly higher than there lowest point so far this year. If you are looking to purchase or refinance your Texas home, now would be an excellent time to lock in a low interest rate.
The Labor Department reported this morning that new claims for jobless benefits for the week ended August 2nd grew by 7,000. A federal program to extend unemployment benefits to cushion the impact of a slowing economy distorted last week’s headcount according to a department spokesman. He said it was not possible to estimate what percentage of the increase in jobless benefit claims could be blamed on the extended benefits program, but he warned the jobless data will likely be skewed for the next six weeks or so as a result. The overall story here is that the labor sector remains weak and as long as this condition exists the Fed will be hesitant to push short-term interest rates higher, a positive for prospects of steady to perhaps fractionally lower mortgage interest rates ahead.
While the weekly initial jobless claims data was mortgage market friendly news it was countered by a report from the National Association of Realtors that showed their index of pending home sales was up 5.3% in June. A sharply improved performance from a decline of 1.0% most economists had been looking for. The index, which measures the number of purchase contracts signed during the month, was strongest in the South with a gain of 9.3% followed by a gain of 4.6% in the West, a 3.4% improvement in the Northeast and a 1.3% gain in the Midwest. One month does not make a trend – but it is a hopeful sign that perhaps the worst of the housing crunch is behind us. As the realtors said contract signings “appear to broadening.” The realtor group is expressing guarded optimism that the fragile momentum building in the pace of home sales will grow as the impact of the massive new housing bill begins to be felt in the coming months.
Uncle Sam will be in the credit market today looking to borrow $10 billion in the form of 30-year bonds. From a technical perspective I see reason to believe a modest rally in the credit markets (including mortgages) may develop as fixed-income investors breathe a sigh-of-relief that the heavy round of incoming supply from the government is finally out of the way. Let’s see what happens following the conclusion of the 30-year bond auction this afternoon at 1:00 p.m. ET