Stronger than expected US economic data and reduced concerns about Europe were negative factors for mortgage rates last week. After dropping lower early in the week, mortgage rates ended slightly higher.
On Tuesday, the European Central Bank (ECB) launched a new liquidity program which provided low-cost loans to banks. This increased their liquidity and reduced the risk of failures. While the program does not directly address the debt troubles of European countries, it eased investor concerns about a broad collapse of the European banking system. As a result, investors partially reversed the flight to safety trade, lifting stocks and hurting mortgage-backed securities (MBS) and mortgage rates.
Nearly all of the housing sector data released last week was positive. November Existing Home Sales rose 4% from October. November Housing Starts increased 9% from October to the highest level since April 2010, although much of the increase was due to strength in multi-family units. Building Permits, a leading indicator, also exceeded expectations. Finally, the NAHB home builder sentiment index rose to the highest level since May 2010.
The final week of the year will be a light one for economic data. Consumer Confidence will be released on Tuesday, Pending Home Sales will come out on Thursday, and Chicago PMI will be released on Friday. Mortgage markets were closed on Monday in observance of the Christmas holiday, and mortgage markets will close early on Friday ahead of the New Years holiday. Also note that trading volume is generally very light during the final week of the year, which means that mortgage rates may be more volatile than usual.
All of us at “Oklahoma Mortgage Lenders” wish you a wonderfully successful 2012. We hope that we all are able to grow our respective businesses in a big way and that we are able to do so together as a team. We thank you for your confidence in us in 2011 and we are excited to work with each of you next year!
Thank you for supporting us in such a remarkable way!
Happy New Year!
Call Pete, Cody, Debbie or Patrick at “Oklahoma Mortgage Lenders” today for a current rate quote!