This entry was posted on Tuesday, March 27th, 2007 at 1:39 am and is filed under Mortgage Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Sacramento Mortgage Rate Update
The 30 year fixed rate mortgage rose slightly this week to 6.0% this week for well qualified borrowers.
Inflation Still the Bigger Threat
After last week’s reports showed increases in both the CPI and PPI numbers for February, the Fed declined to lower interest rates and continues to send hawkish signals about inflation.
However, this week’s falling new home sales and this morning’s declining consumer confidence suggest that the economy may be feeling the effects of the real estate slowdown and the subprime meltdown. What’s ahead for rates?
Will Mortgage Rates Fall Later in the Year?
Consumer spending is the wild card. U.S. consumers treat home equity as spendable income rather than as an asset. That will come to an end this year, as home owners shake the equity piggy bank and hear nothing but silence. “Apprehension about the short-term future has suddenly cast a cloud over consumers’ confidence,” said Lynn Franco, director of the Conference Board who publishes one of the widely watched consumer confidence reports. Once consumers get the picture, the economy will slow the Fed will have to ease rates.
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