Raleigh Home Loan Rates & Cary Mortgage Rates are very HOT however it is not the only thing that is hot here in Raleigh…inflation is heating up but was that mean for Raleigh Home Loan Rates & Cary Mortgage Rates.
My Name is Kevin Martini and I am a trusted mortgage banker with SunTrust Mortgage & welcome to The Weekly Martini.
Last week we saw a double dose of inflation news last week & while the Producer Price Index (which measures inflation at the wholesale level) remained unchanged in August, the year-over-year Core Consumer Price Index (CPI) jumped up to hit the upper-end of the Fed’s threshold of 2%.
So why Kevin Martini is this significant?
The concept is very simple: If inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as Raleigh Home Loan Rates & Cary Mortgage Rates are tied to Mortgage Bonds, this would meansRaleigh Home Loan Rates & Cary Mortgage Rates will move higher.
Remember: Once inflation starts to emerge it can manifest rather quickly. Future inflation readings will be closely watched to see if a trend higher is emerging, and last week’s elevated number will certainly heat up the debate surrounding more stimulus, as more money into the system fuels inflation further. If inflation heats up even more, the Fed will likely back off their “low rates until mid-2013″ mandate. Inflation really does change everything & I will continue to follow this story closely and keep you informed.
The bottom line is that Raleigh Home Loan Rates & Cary Mortgage Rates remain near historic lows & NOW is still a great time to purchase or refinance a home. If I can answer any questions at all for you call (919.858.0023) or email (Kevin@KevinMartini.com) me anytime.
Forecast for the Week: Several pieces of housing news will hit the wires, plus the Fed meets.
• Housing Starts for August will be delivered on Tuesday and are at extremely low levels given the current environment. The July reading was down 1.5% from June…but it was actually up 10% from a year ago in July 2010. Building Permits, a sign of future construction, will also be released on Tuesday.
• More housing news follows Wednesday with the Existing Home Sales Report.
• Also on Tuesday and Wednesday is the regularly scheduled Federal Open Market Committee meeting. With inflation heating up, it will be important to see what the Fed has to say.
• Weekly Initial Jobless Claims will be reported on Thursday as usual, and they
continue to remain above 400,000 rising to 428,000 last week.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result.
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