The Greek bailout package was passed last Monday as expected, and there was little reaction in US markets. Mixed US economic data also had little influence. Strong Treasury auctions were the biggest factor for mortgage rates last week, and rates ended the week a little lower.
Investors are beginning to focus on the price of oil. Concerns about Iran have pushed oil prices up to the highest level in nine months. Higher energy prices are bad for consumers and the economy. Since higher oil prices have two opposite effects on inflation, though, the impact on mortgage rates is uncertain. Rising energy costs add to inflation, but they also slow economic growth, which reduces inflationary pressures. It’s not clear which influence will be larger over time.
The housing data released last week continued to be encouraging. January Existing Home Sales rose 4% from December to the highest level since May 2010. The inventory of listed existing homes declined 1% to the lowest level since March 2005. January New Home Sales again exceeded expectations.
This week, Pending Home Sales will be released on Monday, (today). Durable Orders will come out on Tuesday. Revisions to fourth quarter GDP will be released on Wednesday, along with Chicago PMI Manufacturing and the Fed’s Beige Book. ISM Manufacturing and Core PCE inflation are scheduled for Thursday. Personal Income, Consumer Confidence, and Construction Spending will round out a busy week.
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