Kim Clinton

Turbo Realty of Texas
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Mortgage Rates Move Higher

February 11th, 2011

Mortgage Time   

Compliments of Bob Boyd, Senate Mortgage Banker

Mortgage Market News for the week ending February 11, 2011

Mortgage Rates Move Higher

Inflation concerns and a higher than expected January budget deficit caused mortgage rates to move a little higher during the week. Solid demand for this week's longer-term Treasury auctions helped prevent a larger increase in mortgage rates. Investors hoping for inflation relief from the Fed were disappointed. In testimony on Wednesday, Fed Chief Bernanke suggested that Fed officials view overall inflation levels 

as low and have no near-term plans to tighten monetary policy to fight rising inflation.

Over recent months, mortgage rates have moved higher due to investor concerns that future inflation will rise significantly. Inflation can come from different sources. A desirable source is inflation which results from stronger economic growth, which leads to more jobs and higher demand for goods. On the other hand, inflation which results from large budget deficits comes with very few benefits. Both are pressuring mortgage rates higher right now, but at least with an improving economy more people are able to buy homes.

On Friday, the Treasury released its recommendations for reforming Fannie Mae and Freddie Mac. According to Treasury Secretary Geithner, this report is a starting point for a national debate. The central question is what role the government should have in the mortgage market. Geithner stressed that changes will take place very gradually over a period of years to avoid disruptions to the housing market. 

Also Notable:

  • Weekly Jobless Claims fell to the lowest level since July 2008
  • The Fed's Warsh will resign on March 31
  • The Bank of England made no change in rates
  • Egyptian President Mubarak will step down


Average 30 yr fixed rate:

Last week:


This week:


Stocks (weekly):







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Disclaimer : The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official policy or position of the Houston Association of REALTORS®

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