Quick Mortgage News – End of January 2014

Marc McClendon from Oak Mortgage Group shares his point of view on rate behavior, as well as the potential impact of national/international indicators that are due out in the near future. If you have any questions about these as well as any other mortgage-related question, feel free to call or email Marc at 214.461.0136.


OAK-Mortgage LogoMM ProfileRate Trends:   Rates are stable from last week’s downward slip. Both retail sales and Industrial Production posted tiny gains, but not enough to bring mortgage rates up, especially after the latest monthly employment report.  As has been the case for the last few years, we may experience what appears to be the beginning of a reasonable economic acceleration, only to find that it was a momentary surge.  While the continued slow progress, along with occasional surges, is growth, the economy has not moved to a point of not needing some economic aid, which has been coming exclusively in the form of Fed programs.  A global “flight to safety” where money flows out of other investments and into the relative safety of US Treasuries, helped draw down mortgage rates last week.  A report on China’s manufacturing industry revealed some unexpected contraction, spooking US and global financial markets.

Key news that could affect rates this week:  Mortgage rates are likely to be most influenced by the Federal Reserve meeting this week.  It is widely anticipated the Fed will reduce its bond purchases by another $10 billion per month.  If this comes to pass, mortgage rates could go either way.  If the market believes  the economy will easily outgrow the benefit of the stimulus, then rates could rise, However, if market sentiment is the economy will need more boost, then rates could trend downward.

Quick Article:  “Easier or Harder to Get a Mortgage?”  With the new rules in place, more coming, and a host of other changes in the financial industry, there are conflicting opinions regarding what will happen in the coming months and years.  According to recent Ellie Mae data, the average FICO score of borrowers is dropping.  It is now averaging around 727, whereas a year ago it was 748.

Quick Quiz – How do rates affect my home purchasing power? The following chart, courtesy of Keeping Current Matters illustrates the point.


About Danny Sanchez

Joining Rianne's award-winning team after a successful career as a Program and Operations Manager for a global outsourcing firm (with Fortune 100 companies as his primary clients), Danny has seen The Woodlands grow to what it has become today since 2001. An advocate for innovation and perfecting the Best Possible Real Estate experience, he understands very well that clients always come first. In his own words, "success looks like clients feel that they don't have any needs - because you've more than anticipated them."