The headline for the week was the FED increased the Discount Rate by .25 of a point. This has no immediate correlation to mortgage rates, however does indicate that the FED is starting to put a strategy in place where we will start to see a gradual increase in over-all interest rates. The over-all out look for interest rates is bearish while equity markets continue a more bullish view. The FED will be very cautious not to let interest rates rise in a dramatic way seeing that the housing market though improving is still weak as short sales and foreclosures still are a higher percentage of sales especially in certain areas throughout the country. Rates over-all for the week ended at 5.125% on average (again depending upon credit score and loan to value). For first time buyers the FHA 5 year ARM program is becoming more popular with start rates in the range of 3.625 to 3.750%. Have a great weekend!
Market Update- Financials (Interest Rates)
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