Colorado Housing Market Update

On February 15, 2011, in mortgage colorado, by admin

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Proposed Housing Overhaul Will Increase Rates:

The Obama administration released their ideas on how to overhaul Fannie Mae, Freddie Mac and the Federal Housing Administration.  Currently, all three issue mortgage backed securities that are backed or guaranteed by you the tax payer.  This gives these securities very low risk and has great appeal to foreign investors that seek low risk.  This is why your mortgage rates are still historically very low.

However, the proposed changes will enable the government to ease away from being such a big player in the mortgage business, moving from 95% of the total market down to as low as only 40% of the total market.  By doing so, rates will naturally adjust upward to equalize with the new risk levels.  These proposed changes will take a long time to pass and to be put into effect, so take advantage of today’s low rates and loan programs now while housing prices are still very affordable.

What Happened to Rates Last Week:
colorado mortgage rates

Mortgage backed securities (MBS) lost -42 basis points last week which caused 30 year fixed rates to move higher and closed at their highest levels of 2011.  As we have discussed several times, mortgage rates are pushed lower when the economy is performing poorly and their is little to no risk of inflation.  So, as the economy continues its upward march out of the recession, mortgage rates are pushed upward on the stronger growth and inflationary concerns. We had a couple of strong economic reports last week. The weekly Initial Jobless Claims were much lower than expected and Wholesale Inventories saw stronger gains.  Both were positives for the economy and therefore negative for mortgage rates.

What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week.  They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.  I will be watching these reports closely for you and let you know if there are any big surprises.

mortgage rates denver

It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets.  Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon. 

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Vince Reece
Senior Loan Officer
Office: 303-840-0966
Cell: 303-818-0699
19519 E Parker Square Dr
Parker, CO 80134

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