A Loan With Jennifer: Interest Rate Update 04/23/13

Did you know that Houston created as many jobs in February this year as Austin in the last 12 months? There is nothing wrong with Austin, mind you…but to put things into perspective at how large our influx of new employees really is. The Houston-Sugarland-Baytown Metro Area led the state in (annual) job growth, adding 118,700 new jobs, a 4.5% increase, in the 12 months ending February 2013. Many would say (including myself) that this is one of the main reasons we are seeing low inventory. More employees, more families need housing , and more activity for Houston! With the abrupt stop in ‘spec’ building in 08/09, many builders only built on an ‘as contracted’ basis. Therefore, available inventory dwindled. The market of late has had to depend on resale of homes to house these new Houstonians! We see builders now building specs for some time, but its not fast enough to keep up with demand. Wow………………..It’s been crazy.

In the markets………While it was a rough week for the stock market, mortgage markets were very quiet. The economic data contained no major surprises, and there was little change in mortgage rates during the week.

The economic news this week showed that inflation levels remain low. The most closely watched US inflation indicator revealed that March Core CPI inflation was just 1.9% higher than one year ago. In addition, China, the world's second largest economy, reported lower than expected first quarter GDP growth. Declining commodity prices help keep inflation in check. Low inflation is always good news for mortgage rates. It is even more important right now because the Fed has announced that its MBS and Treasury purchase program will be scaled back or concluded if inflation is seen to be rising too rapidly. The Fed's program has been instrumental in keeping mortgage rates low.

The economic growth rate in the US is also very favorable for mortgage rates right now. Most signs point to steady growth at a modest rate this year. The Fed's Beige Book, released this week, reported moderate economic growth in most regions through early April. The Fed's Lacker stated that he sees the economy growing at a 2.0% annual rate this year, which is similar to the consensus view of Wall Street economists. Modest economic growth with low inflation is the sweet spot for mortgage rates.

Enjoy the weekend!

RATES as of April 18^th, 2013 (Up for the Week)

The following assumptions apply:

20% Down Payment (Conforming) / 25% Down Payment Jumbo (Lower down payments available – call for details)
1% Origination Fee
Escrows Required (if no escrow, higher fees may apply)
Purchase Transactions, Primary Residence (Refinances have different rates)
30 day closing
Credit Score 740 +
Debt to income ratio <=40%
Full Documentation of Income/Assets

*Conforming ($200,000 - $417,000)**	*Jumbo ($417,001- $1,000,000)**
10 year (fixed) 2.500% APR 2.612 %	15 year ( fixed ) 3.625% APR 3.659%
15 year (fixed) 2.625% APR 2.702%	30 year ( fixed ) 3.875% APR 3.894%
30 year (fixed) 3.375% APR 3.418% 7/1 ARM 2.500% APR 5.101%	5/1 ARM 2.375% APR 5.494% 7/1 ARM 2.875% APR 5.422%
5/1 ARM 2.500% APR 5.636%	10/1 ARM 3.125% APR 4.989%

FHA/VA call for quote (max loan $270,000)