First quarter economic growth was solid through slightly lower than expected at 2.2%. An improving economy can pressure high rates. Mortgage rates improved as overseas investors took to the safety of U.S. bonds. Political turmoil in Italy was the largest catalyst as their markets crashed. The labor market continues to tighten, with unemployment at a 17 year low of 3.9%. A strong labor market is supportive of a Fed rate increase in June. Consumer spending increased in May, amid rising inflation. Inflation and a strong labor market will likely lead to a Fed rate increase at Junes FOMC meeting.
Home price gains may be slowing down as mortgage rates creep up. March prices were unchanged compared to February. Even still, values rose 6.5% nationally over last year. Housing prices are now 7.8% above their previous peak during the housing boom Pending home sales fell 1.4% in April compared to March. Most economists blame low inventory rather than slightly higher mortgage rates as the cause of 2006.
Check out these great rates and give me a call today!
Conforming 30 year fixed 4.500%
Conforming 15 year fixed 4.125%
Jumbo 30 year 4.500%
Jumbo 30 year 5/1 ARM 4.250%
FHA 30 year 4.625%
VA 30 year 4.375%
Need a loan preapproval? Give us a call: Diversified Capital Funding
Eric Muller - Mortgage Loan Officer, 925-708-0957, Eric@divcap.net