What Did Interest Rates Do Last Week?

** according to Freddie Mac **

 30-yr Fixed – Lower

Last Week:  4.96% — lowest since 1971

Previous Week:  5.01%

1yr Ago:  5.69%

15-yr Fixed – Slightly Higher

Last Week:  4.65%

Previous Week:  4.62%

1yr Ago:  5.21%

5/1 ARM – Lower

Last Week:  5.25%

Previous Week:  5.49% 

1yr Ago:  5.40%

Highlight of Last Week’s Major Economic Reports

According to Freddie Mac, “Interest rates for 30-year fixed rate mortgages fell for the 11th straight week to another record low, due in part to the slowing economy and government actions.  So far, both the U.S. Treasury Department and the Federal Reserve have added over $100 billion in liquidity to the mortgage market since September 2008, which put downward pressure on interest rates for fixed-rate mortgages.  The Federal Reserve may add up to an additional $570 billion more this year, based on its November 25, 2008, announcement, to further shore up mortgage lending and keep rates low.”

On the economic news front, Retail Sales ended up being much worse than the already ‘horrible’ expectations for December.  Prices are falling all around, but fortunately we’re not in deflationary territory – at least not yet.  In December, producer prices dropped 1.9%, while consumers’ costs eased by 0.7%. 

What to Look for This Week

The economic calendar is very light this week, so expect the stock market to drive the direction of mortgage rates.  We’ve got the inauguration on tap, and that should generate some buzz with investors.

Short-Term Rate Outlook

Stable