Monday, July 27, 2009

Mortgage Rate Report

In a report sent by Mark Weddle of Regions:

Early in the week, a forecast from the Fed that inflation should remain low for the next couple of years moved mortgage rates lower. The economic news later in the week was less favorable for mortgage rates, however. Strong earnings reports produced a rally in the stock market, which pushed mortgage rates higher. In the end, mortgage rates finished the week essentially unchanged."
In testimony before Congress on Tuesday, Fed Chairman Bernanke provided an update on the Fed's outlook for economic conditions. Of note, Bernanke predicted that inflation will not be a concern any time soon, which was good news for mortgage rates. While he expects economic growth to turn positive later this year, he suggested that the labor market may be weak for several years. As a result, the fed funds rate will likely remain near zero for "an extended period".