Mortgage rates have moved up slightly today, ending an unprecedented move downward that saw mortgage rates move down every day since last Friday. The market will be watching US Economic data and any news coming out of Europe for any clues as to where mortgage rates go from here.
We’ve consistently made new all time lows many, many times in the past weeks and months, making 2012 a historic time for mortgage rates that will likely be remembered for years to come when mortgage rates do eventually move upward.
FOMC Releases Minutes
This week saw the release of the June FOMC (Federal Open Market Committee) minutes that occurred three weeks prior. The FOMC or FED is responsible for setting monetary policy in the United States which affects mortgage rates and money supply.
The big question facing FED watchers is if and when further FOMC stimulus or QE3 (third round of quantitative easing) will take place. FOMC members were mixed on whether there is a need for further stimulus, so market watchers will have to continue to speculate on when or if further action will be taken by the FOMC.
From the FOMC Minutes:
Activity in the housing sector generally improved in recent months, but it was still restrained by tight credit standards for mortgage loans and the substantial inventory of foreclosed and distressed properties. Both starts and permits of new single-family homes rose in April and May but remained at low levels. Although starts of new multifamily units ran at a somewhat lower pace, on average, in April and May than in the first quarter, permits increased in recent months, likely pointing to further gains in multifamily construction. Home prices rose for the fourth consecutive month in April. Sales of existing homes were a little higher in April than their monthly average in the first quarter, but the pace of new home sales was roughly unchanged.
The minutes noted that rates would likely remain at “exceptionally low levels” through 2014. There was also discussion of “new tools” to help effect monetary change. This mention is sure to cause speculation among market watchers.