February 12, 2010
February 12, 2010 by admin
Mortgage rates moved higher to end the second week in February, despite a dip in the equity markets to end a choppy week of trading on Friday. Interest rates had previously gained some relief from the broad market selloff as more investors were pulling funds out of equities and investing into the bond markets. Yields on the closely followed ten year Treasury Bond ended at 3.68% in late action on Friday. For the week the range on the ten year was between 3.58% and 3.72%. Thirty year fixed rate home loans continue to hover just above five percent (zero points) with most national mortgage lenders, and are in the mid four percent range on fifteen years for borrowers with excellent credit and sufficient home equity.
Volatility remains quite elevated as witnessed by the rapid movements in the stock market indexes this week. Concerns of international countries (Greece, Dubai) debt loads as well as growing concern over the level of debt and size of the government in the U.S. have become a focus for economists and investors who are gauging the economic recovery and the impact of the global markets.
The FOMC also made headlines this past week, chairman Ben Bernanke reaffirmed that the Fed is keeping a close eye on the economy and interest rates, but would be airing on the side of caution as it concerns raising borrowing rates. This news is a strong signal that their will likely be little to no movement in the Fed’s monetary policy over the next 4-6 months. Concerns that the Fed could begin raising rates as early as March of this years are all but erased. The Fed appears to be airing on the side of caution as it attempts to help stabilize the economy and promote growth. The low interest rates have helped homeowners refinance their mortgages and spurred a rally in the housing markets in 2009, but their remains a number of concerns whether the real estate market can sustain the momentum that was created last year. The major concern on the minds of most economists and investors is the lack of meaningful job growth. There remains a large disconnect between small to medium sized business and the financial markets as it relates to lending. The lack of financing in the market for businesses has greatly impacted their ability to fund operations and growth plans and is a key reason why jobs are not being created. You can expect additional government pressures to begin being placed on the financial sector to fulfill their role in stabilizing the markets, especially when you consider they have had the luxury of zero percent lending from the FOMC for over a year, which has been a great aid in helping to improve their balance sheets.
The markets will be closed in observance of Presidents day on Monday the 15th.