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Peter Thompson - Illinois Mortgage Broker
Illinois Mortgage Broker
Peter Thompson

Prospect Mortgage
NMLS # 283204
Direct: 331-333-7093
Cell: (630) 479-6424
Fax: 877-773-1476
1717 Naper Blvd., Suite 300
Naperville, IL 60563
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Chicago Illinois Mortgage Rates Week in Review for the Week Ending 02/01/2013

4th February 2013

The consensus in the markets now, is that the worst of the decline is behind us, and the economy is on the mend. The economic data last week was mixed. Reports showed that the overall US economy shrank in the last quarter of last year, the first time we have seen a fall in the last 3 years,Chicago Illinois current mortgage rates, Chicago FHA mortgage rates for today with GDP coming in .1% lower than the previous quarter. But this was mostly a result of a drop in government spending, and private industry continues to grow. The Case Schiller home index shows housing prices are moving higher, consumer confidence came in strong and China came in with strong manufacturing  numbers, another indication that the global economy is better than expected. The Big Kahuna of reports is always the monthly jobs report, and this month showed an increase of 157,000 jobs, while the unemployment rate ticked a touch higher to 7.9%. The numbers came in right about where expected, but the revisions of the two previous months showed that the economy added over 100,000 more jobs than was previously reported. It’s likely that the unemployment rate will continue to tick higher now, as more people who have stopped looking come off the sidelines and start looking for jobs again.

Again, the markets are looking at these signs as more evidence that the worst is over. First, the stock market closed on Friday above 14,000 in the Dow Jones average, the first time since October of 2007. This happened after a week of better than expected earning reports, but the bigger reason the index went higher may have been a result of investors moving money out of bonds and into stocks. Stocks are considered a riskier investment, so when there are dark clouds on the economic horizon, investors are less concerned about making big profits and more concerned about preserving what they have. This has been the case over the last several years, and a big reason why interest rates have been locked in at historic lows. But lately, it seems that the market tides are shifting, and fixed income bonds aren’t perceived as the safe haven they were before. Last week the bond markets, both treasury bonds and mortgage backed securities, gyrated around like crazy. Volatility is now the norm and there were re-prices on mortgage rates several days last week, meaning that the price you were quoted in the morning, may have changed by the afternoon. On Friday, after the release of the jobs report, mortgage rates initially reacted to the positive, with mortgage backed bonds surging to their best point of the week. But that didn’t last long. Over the course of the day mortgage rates got hit, and ended the sharply lower from the highs of the day with a slight loss for the. No one knows where we go from here, but those waiting for mortgage rates to drop lower, may be in for a long wait.

If you would like a rate quote, have any questions or want to go over your situation in depth, let me know how I can help.

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