Central Texas Mortgages are still affordable

Sente Mortgage

Friday Mortgage Update

Mortgage News for the week ending 02-22-13

This was a quiet week for mortgage rates.  Most of the economic data came in close to expectations so there was no reason for mortgage rates to move either up or down.   

Federal Reserve officials are divided concerning the Fed’s continuing purchase of mortgage backed securities.  The intention is  to keep interest rates low.  The Fed’s current position is to continue to buy securities as long as the unemployment rate is over 6.5% and inflation remains under 2.5%, but increasing worries about the costs and risks of this program leave uncertainty about how long the purchasing program will continue.

Inflation reports released this week (CPI and PPI) indicate that core inflation remains far below 2.5%.  If core inflation rates were to increase above 2.5%, it would pressure the Fed to reduce its stimulus which would lead to higher mortgage rates.

On a local note, the Real Estate Center at Texas A&M University released housing statistics for the Austin area. Last month marked the 20th straight month of existing single-family home sales increases and the most January home sales since 2007.  The number and dollar volume of sales were up 33% and 55% respectively above January 2012 statistics. The market had 2.5 months of inventory, which was 1.6 months less than January 2012 and the lowest inventory in the area in the last decade.

Upcoming News for next week:

The final week of February will be packed with economic events. The biggest news may be Fed Chief Bernanke’s testimony before Congress on Tuesday and Wednesday. New Home Sales will be released on Tuesday. Durable Orders and Pending Home Sales will come out on Wednesday. Personal Income will be released on Friday. Consumer Confidence, Consumer Sentiment, and Construction Spending will round out the schedule. We also have Treasury auctions next week. All of these will make it a more volatile week for mortgage rates.

Last 30 day trend for 30 year, fixed mortgage rates:

Total Monthly Payment Factors

The following factors are a quick and easy way to estimate (+ / – $50) total monthly mortgage payments based on sales price. Multiply the sales price times the factor for an estimate of total monthly paymentincluding property taxes, insurance, and mortgage insurance. If your customer has a target payment amount, simply divide the desired payment by the factor to determine the sales price. (Factors based on 720 mid-credit score)

Conventional:

95% LTV = .0079

90% LTV = .0076

80%LTV = .0062

FHA:

96.5% LTV = .0079

VA:

100% LTV = .0075

Sente Mortgage is an Equal Housing Lender. Information is subject to change without notice. This is not an offer for extension of credit or commitment to lend.