Texas Mortgage Rate Update 7/21/2008
Texas mortgage rates have moved slightly higher today. Dallas, Houston, Austin, San Antonio, and College Station interest rates are just slightly lower than there highest point so far this month.
This morning the bond market was trading weaker and making a test of 4.10% which we believe has an outside chance to hold for awhile. Last Thursday and Friday the bond and Texas mortgage markets were beaten down in price on the return of inflation fears triggered by the big increase in June CPI that hit on Wednesday. Inflation concerns are fueled by investors and central banks in Europe as well as the Fed, but until Wednesday’s CPI US inflation reads were up but not increasing much.
Inflation debates could fill a novel; a fast declining economy and some relief in oil price increases would argue that inflation has little additional push particularly with no reason to expect wages will increase. On the other side of the inflation outlook, there is reason to be concerned that the run-up in food and energy prices (even if they were to stabilize) are beginning to filter down into other prices. All that said, investors are already at panic levels with the Dallas mortgage crisis and the unsettling drama increasing in the banking sector, so there is no desire to lean to any optimistic outlook. Fed Chairman Ben Bernanke said June 15 in his semiannual testimony on the economy to the Senate Banking Committee in Washington that the “upside risks to the inflation outlook have intensified.”The markets this week will focus on (1) whether crude oil prices continue to drop in a continuation of the week-long $18 plunge, (2) whether the S&P 500 can sustain its sharp 5.1% upside recovery seen in the latter half of last week, (3) Fed policy which is likely to become more hawkish if the stock market recovery holds and the US economic data remains only mildly negative, (4) T-note prices which have the potential to extend last week’s slide if the stock market recovery holds and there are no fresh banking blow-ups, and (5) this week’s heavy slate of Q2 earnings reports.
Later this afternoon Sec Treasury Paulson will be talking (3:30) on CNBC; likely on his initiative to get banks to start issuing covered bonds without waiting for legislation from Congress. Regulators can provide the guidance that lenders are asking to be set in law. Paulson will also discuss the agency mess; this morning Freddie is saying it may cut the number (amount) of loan purchases to shore up its capital amid record delinquencies. The government-sponsored company is also considering selling securities and reducing its dividend while it prepares to issue $5.5 billion of stock. Just what we need now; Texas mortgage buyers cutting back on purchases. We don’t believe Freddie can raise money now at rates they can live with; the agency will be a drag on the Texas mortgage markets as it finds the only avenue is to sell off assets.As always, If you have ever have a question on whether it is the best time for you to refinance your Texas loan or what interest rate you can get when buying your next Texas home, feel free to give us a call or shoot us an email by filling in your information on the right hand side of this page.
As always, If you have ever have a question on whether it is the best time for you to refinance your Texas loan or what interest rate you can get when buying your next Texas home, feel free to give us a call or shoot us an email by filling in your information on the right hand side of this page.