ABBA First Mortgage News

Wherefore art thou, Oh predicted Spike in Rates?

Not that we long to see thou ugly face. However, it does not seem as though the Federal Resrve Board’s timing was accurate when predictng that the rate would be close to the 5’s by this time last year.  The 30 year interest rates were stable for the second straight week.  For the week ending July 19, Freddie Mac announced that 30-year fixed rates decreased one tick to 4.52% from 4.53% the week before. The average for 15-year loans fell slightly to 4.00% and the average for five-year adjustables moved up to 3.87%. A year ago, 30-year fixed rates averaged 3.96%. Attributed to Sam Khater, Chief Economist, Freddie Mac –“Manufacturing output and consumer spending showed improvements, but construction activity was a disappointment. This meant there was no driving force to move rates on home loans in any meaningful way, which has been the theme in the last two months. That’s good news for price sensitive home shoppers, given that this stability in borrowing costs allows them a little extra time to find the right home. Unfortunately, don’t expect much relief from the tight inventory conditions plaguing many markets. As seen again last month, new home construction is not picking up to meet demand, and as a result, home prices are still rising at double the pace of income growth.”  Unfortunately, at the beginning of the following week, July 25th, the MBS market tanked and our rates felt thr brunt of the worsening and ticked up by .125% as noted on the Rates Page of ABBA First Mortgage.  Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

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