Mark Twain once said, “I shall never use profanity except in discussing house rent and taxes.” Today, many consumers can cross taxes off their to-do list for the year. However, home financing is always a topic of concern.

There is great news, though. When consumers file taxes, they often receive refunds. Many of them will use the extra money as a down payment for a new home. In addition, home prices & mortgage rates continue to offer exceptional value. As always, I'm here to help – and to secure the most affordable financing for your customers. Let me know if there's anything I can do for you.

Sincerely,

Gary Bussard
gbussard@envoymortgage.com

Mortgage Rates Improve on Inflation Data
Highlights Average 30 yr fixed rate Stocks (Weekly)
The Beige Book reported that economic activity "generally continued to improve"

Capacity Utilization rose to the highest level since August 2008

The sovereign debt of Ireland was downgraded again

Gold prices reached a record high above $1,480 per ounce

On target inflation data and strong demand for the longer-term Treasury auctions were favorable for mortgage rates last week. The other major economic reports contained few surprises. As a result, mortgage rates ended the week lower.

In recent weeks, the primary influence for mortgage rates has shifted from global events in Japan and the Middle East to the outlook for inflation. Last week's rate hikes in Europe and China to fight inflation raised concerns that the Federal Reserve was falling behind with its lack of tightening, and mortgage rates moved higher. Last week's tame inflation data eased those concerns, however, and mortgage rates improved. The March Consumer Price Index (CPI) rose 0.5% from February, matching the consensus forecast, and was 2.7% higher than one year ago. Core CPI, which excludes food and energy, increased at a low 1.2% annual rate, which was a little lower than expected.

Rising commodity prices have focused attention on the distinction between overall inflation levels and core inflation levels. Core inflation excludes the volatile food and energy components, so it is often viewed as a better indicator of short-term inflation trends by economists and Fed officials. While consumers certainly struggle with higher gas prices, longer-term inflation trends generally are more influenced by other factors such as wages and housing costs, which recently have been increasing very slowly. In short, stronger than expected demand for commodities and violence in the Middle East have pushed energy prices significantly higher, but Fed officials forecast that this represents a temporary increase in overall inflation levels. Commodity prices are not expected to climb at this pace indefinitely. If food and energy prices stabilize, then the gap between overall and core inflation levels will likely shrink.

This week will be shortened by a holiday and will be a light week for economic data. Housing Starts will be released on Tuesday. Existing Home Sales will come out on Wednesday. Philly Fed and Leading Indicators are scheduled for Thursday. Mortgage markets will close early on Thursday and will be closed on Friday in observance of Good Friday.

The market commentary material provided is from a third party vendor, MBSQuoteline, and is not necessarily the opinions of the sender or the organization they represent. This information is intended for educational purposes only and should not be construed as investment and/or mortgage advice. Additionally, the material is deemed to be accurate and reliable, but there is no guarantee it is without error.