Weekly Mortgage Newsletter Week of August 21, 2011 Mortgage Market Commentary
Mortgage rates dropped to new lows again last week as fears of a global economic slowdown grew. Financial markets around the world were once again beaten down as traders shifted money around, in many cases moving it into vehicles that provided little to no yield, but provided a measure of perceived security. Even with the recent downgrade of US debt, US Treasuries continue to be seen as the safest place. However, US economic news was not as bleak as one might assume. Industrial Production rose by 0.9%, Housing Starts remained level, and the LEI grew 0.5%. We’ve even had inflationary pressures slightly increasing, which is often seen as a byproduct of economic output. So, are we heading into another recession? Many analysts believe we are not, but if enough of the global financial market panics and behaves as if we are, it may become a self-fulfilling prophecy. This week could be another choppy week for financial markets. While it seems that rates couldn’t fall any lower, bad news could make further decreases a reality. Good news may shoot rates upward!
Housing Affordability Index Remain High With the pop in the housing bubble and drop in home prices, housing affordability has climbed in recent years. The National Association of Home Builders/Wells Fargo Housing Opportunity Index was released last week. According to this Index, 72.6% of new and existing homes sold in the second quarter of this year were affordable to families earning the national median income. The Index has remained above 70% since the first quarter of 2009.
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I'm not going to limit myself just because people won't accept the fact that I can do something else.
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10 Year Treasury Note
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