What Did Interest Rates Do This Week? ** according to Freddie Mac ** 30-yr Fixed – Higher This Week:  6.03% Last Week:  5.88% 1yr Ago:  6.16% 15-yr Fixed - Higher This Week:  5.62% Last Week:  5.40% 1yr Ago:  5.87% 5/1 ARM – Higher This Week:  5.68% Last Week:  5.48% 1yr Ago:  5.88% Highlight of This Week’s Major Economic Reports Not-so-bad economic news and continued fears of inflation sparked a jump in mortgage rates this week.  This has led to many downgrading their beliefs that the Fed will cut rates much – if at all – when it meets next week. While economic growth remains subpar, recent data shows that things may not be as bad anymore as feared.  Unemployment claims were down last week.  Manufacturing isn’t as down as it had been earlier in the year.  Overall economic activity was less negative – a possible sign that the downturn is leveling off. On the housing front, home sales fell again in March.  Existing Home Sales fell 2% last month, while New Home Sales tumbled 9%.  The good news to these bleak numbers is that the declines were softer than expected, and the average price for existing homes did go up slightly by 0.9%.  With demand continuing to stay low, inventory remains at higher levels, but many economists expect for inventory to come back down in the not too distant future. The relentless spike in food and oil prices (hello, $5/gal?) are weighing heavily on our checkbooks, so the government has decided to start shipping the “stimulus checks” earlier than expected.  We probably shouldn’t expect for this to do much to actually stimulate the economy, as this extra money will likely just go towards paying for gas and food. The market has set the expectation that the Fed will cut short-term rates by 0.25% next week.  It is also anticipated that they will note stability in the financial markets and will shift their focus back to inflation – a sign that this may be the end (at least for now) to the rate cuts.  Don’t take this as bad news, however, as the Fed’s rate cut will only impact the Prime Rate.  Mortgage rates, remember, are separate and follow longer-term bond yield movement. What to Look for Next Week The Fed’s monthly policy meeting and the April Employment Report will be the headliners for the week. We will likely see a 0.25% rate cut from the Fed (perhaps the last one for now), which has already been priced in to current mortgage rates.  And, many expect for the unemployment rate to tick up slightly in April. Odds aren’t great for us to see any improvement in rates. Short-Term Rate Outlook Slightly Higher Tools to Help Your Buyers & Sellers Rates on the rise?  It doesn’t matter!  With Pre-Purchase Rate Protection from PHH Mortgage, you can protect your purchasing power with the ability to cap your interest rate for up to 90 days at no cost while still offering a “float down” option to take advantage of possible rate improvements.  So, whether rates go up or down, you will win! Call Marie Funston – PHH Mortgage – (512) 691-6757