New home sales surpassed expectations and consumer sentiment rose for July; these readings among others suggest that the economy continued to improve and that consumer confidence in the economy improved as well.
Last week saw a relatively quiet week due to the 4th of July holiday, but there were some housing-related developments.
The past week was active for economic news and mortgage rates. The aftermath of the Fed’s indication that it may start dialing back its multi-billion dollar monthly purchases of Treasury and mortgage backed securities has sent mortgage rates to record highs.
Comments by Fed chairman Ben Bernanke after Wednesday’s FOMC meeting caused havoc in financial markets as investors anticipated the potential effects of any rollback of the Fed’s policy of quantitative easing (QE). Chairman Bernanke said that the Fed may begin reducing its $85 billion monthly purchase of Treasury securities and MBS toward the end of this year.
Mortgage rates fell last week and approached or reached record low levels. According to Freddie Mac, the average rate for a 30-year fixed rate mortgage (FRM) fell from 3.40 percent to 3.35 percent. Average rates for a 15-year FRM moved from 2.61percent to 2.56 percent.