Frank Nothaft Mortgage Quotations

Mortgage rates remained fairly stable this week as the financial markets tried to discern just how quickly the economy is growing and how sustainable that growth will be.

Mortgage rates have been under 7 percent for the past eight weeks,

Mortgage rates fell this week as a result of the Consumer Confidence report , which hit a 4-1/2 year low. Lower confidence translates into slower consumer spending. Less spending means less growth, and less growth means less inflationary pressure, keeping mortgage rates affordable.

Mortgage rates continued to set records. Interest rates remain the lowest in Freddie Mac history; indeed, they are the lowest we have seen since 1967.

Mortgage interest rates were up this week on news that February employment figures suggested an economic upturn. That news, however, puts a bit of upward pressure on long-term mortgage rates.

Consumer spending has kept the economy moving, and when initial holiday sales were better than expected, financial markets reacted with enthusiasm. It was this potential pick-up in the economy that caused interest rates, including mortgage rates, to drift upwards this week.

Financial markets are feeling more confident that the Fed will not raise rates any time soon. Add to that the fact that recent economic data shows core inflation is less than the market expects, and we see mortgage rates drop once again.

For the past six months, 30-year fixed rate mortgage rates have hovered between 6.75 percent and 7.25 percent. We continue to see a very low mortgage rate environment, and this has played a key role in the high level of housing construction we have witnessed over the last two quarters.

With mortgage rates low and consumer confidence high, Freddie Mac economists expect the housing market to remain strong in the months ahead.

As a matter of fact, it looks as though 1998 will register the lowest annual mortgage rates in 30 years.

Long-term mortgage rates will more than likely rise over the next few months, albeit modestly compared to shorter-term rates.

With productivity up and inflationary pressures muted, the Federal Reserve Board elected this week not to change a key short-term interest rate. Moreover, most other economic data releases, such as unemployment and manufacturing, painted a slightly negative picture for future economic growth. These factors combined to keep mortgage rates stable.

The strength in employment growth and an unexpected jump in consumer credit in January helped push mortgage rates a little higher this week. While long-term interest rates are at the highest level since May of 1998, they are still very affordable, particularly when compared to the 1970s and 1980s.

Bond yields have been creeping up on an almost daily basis since the beginning of October, pushing mortgage rates up as they go, ... Inflation remains low, however, and we expect that to continue into 2004 and beyond. And as long as it does, we won't see mortgage rates rising very dramatically.

The Federal Reserve's recent cut in interest rates and a continued concern over weakness in the overall economy contributed to another drop in mortgage rates this week. In spite of the slowdown in other sectors and a lessening of consumer confidence, declining mortgage rates since the first of the year have helped to support housing activity.

Following the onset of the Iraqi conflict, financial markets seem to have an upward bias for mortgage rates. However, that's not to say that uncertainty has diminished in any large way, but that it has shifted to a different set of unknowns.

The new home sales rate has remained robust for a good many months already. Certainly adding to the level of sales in the past six-to-12 months has been a very favorable level of mortgage rates, which are basically hovering around 7 percent.

all indications are that mortgage rates will continue to be very affordable in the coming year.

The escalating tensions within the U.N. over the impending resolution on Iraq and dismal economic news this week sent the stock market tumbling and with it went bond and mortgage rates. The high volatility is likely to remain for a while. But since there are no upward pressures at the moment, any sustained rise in rates in highly unlikely.

As the economy continues to show signs that the recession is ending, the housing market continues to expand thanks, in large part, to current low mortgage rates. And as long as inflation is not an issue in the economy, lending rates should remain around 7 percent.

There was little activity during this holiday week to move mortgage rates one way or another,

There was no news this week that would drive mortgage rates in one direction or the other. Therefore, mortgage rates didn't have much reason to move a lot, staying below 7 percent for the second week running.

There's about $6 trillion in single-family mortgage debt outstanding, and total home value is about $13 trillion, which means there's about $7 trillion in home equity outstanding. Last year was a big year for liquefying home equity -- about $100 billion. That's a drop in the bucket compared to $7 trillion.

Current record breaking low mortgage rates are keeping demand for housing strong, even as the overall economy stumbles sluggishly into the first part of the new year.

Currently the market is focusing on an anticipated economic recovery within the next six months. That focus put some upward pressure on mortgage rates this week, causing them to rise. There remains good volatility though, due to market speculation over exactly when and how strong the rebound will be.

With the unemployment rate at a low of 4.3 percent and mortgage rates remaining at present affordable levels, we expect the housing market to continue to be strong into the coming months.

Today's annual average mortgage rates are below even that projection thanks to the spring 'soft-patch' in economic growth.

It was no great surprise that housing starts rose for the second time in three months since mortgage rates in November reached levels not seen since the mid-1960s. Since mortgage rates are not expected to increase significantly, we remain confident that the housing industry will continue to be alive and active well into 2003.