First Time Home Buyers
Mortgage rates improved last week as money poured out of the stock market. The S&P dropped 4% in its worst week since October 2009.
This week looks to be extremely volatile.
The biggest news of the week is the first Federal Open Market Committee meeting of 2010. The Fed is not expected to change the Fed Funds Rate, but Wednesday’s press release will move mortgage rates. If the Fed indicates that the economy is recovering how they expected it to, mortgage rates will rise. If the Fed indicates continued weakness, mortgage rates will dip a little lower.
What the Fed says will be more important than what the Fed does.
Other data this week includes the Case-Shiller Index – a measure of home prices nationwide — and the New Home Sales report. The Case-Shiller Index has registered mild home price improvement over the past 8 months and its latest report is expected to show the same. New Home Sales should be similarly strong.
Existing Home Sales took a nosedive today–down 16.5%, but there are some reasons behind it:
- The initial tax credit expiration date of November 30, 2009
- Sharply rising mortgage rates throughout the month of December
- A general slowdown from the holidays and from the weather
This recent tick lower in rates has brought the conforming and FHA interest rates back down to about 5%. Great news for first time home buyers.
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