Brentwood TN Real Estate:Finance Market Update May 12th, 2008
Brentwood TN Real Estate
Good news for Brentwood TN Home buyers and the real estate market. Mortgage bond prices rose last week pushing mortgage interest rates lower. Stocks fell which helped bonds rally. Trading remained very volatile. Record high oil prices tempered improvements in mortgage interest rates as the fear of inflation continued to dominate the financial markets. OPEC blamed speculators and a weak dollar while some analysts expressed supply concerns associated with unrest in Nigeria. Foreign demand for US debt securities dwindled. For the week, interest rates on government and conventional loans fell by about 3/8 of a discount point.
The consumer price index data Wednesday will be the most important event this week. Retail sales, industrial production, capacity use, housing starts, and consumer sentiment data all have the potential to cause mortgage interest rate volatility. For more information, or to find a lender near you: Call Vanessa Stalets your Brentwood TN Real Estate leader. 615-957-6333
Economic Factors |
Economic Indicator | Release Date Time | Consensus Estimate | Analysis |
Retail Sales | Tuesday, May 13, 2008 | Unchanged | Important. A measure of consumer demand. Weakness may lead to lower mortgage rates. |
Business Inventories | Tuesday, May 13, 2008 | Up 0.5% | Low importance. An indication of stored-up capacity. A significantly larger increase may lead to lower rates. |
Consumer Price Index | Wednesday, May 14, 2008 | Up 0.3%, Core up 0.2% | Important. A measure of inflation at the consumer level. Lower than expected increases may lead to lower rates. |
Industrial Production | Thursday, May 15, 2008 | Down 0.2% | Important. A measure of manufacturing sector strength. Weakness may lead to lower rates. |
Capacity Utilization | Thursday, May 15, 2008 | 80.2% | Important. A figure above 85% is viewed as inflationary. A decrease may lead to lower rates. |
Philadelphia Fed Survey | Thursday, May 15, 2008 | None | Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates. |
Housing Starts | Friday, May 16, 2008 | Down 0.7% | Important. A measure of housing sector strength. Larger than expected decrease may lead to lower rates. |
U of Michigan Consumer Sentiment | Friday, May 16, 2008 | 63.0 | Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates. |
Market Conditions
There is a Chinese proverb that states, "May you live in interesting times." It is often argued that the word interesting is meant to be a synonym for turbulent or dangerous. This phrase hits the bull's-eye given the current state of the financial markets.
While stocks and bonds are swinging around wildly there is some good news for Brentwood TN Real Estate and other markets as well. Interest rates for conforming and FHA/VA loans are still historically low by many standards, which is great news for first time home buyers in the Brentwood TN area.
However, low rates are not a given considering the escalating inflation fears that continue to dominate trading amid rising oil prices. Many analysts predict oil prices will continue to rise. While this doesn't automatically equate to higher mortgage interest rates, rising energy prices are usually viewed as inflationary. Inflation erodes the value of bonds causing bond prices to fall and rates to rise. Other investors believe slowing growth and the credit crisis will eventually stem the rising prices. This scenario would generally be positive for bonds, which always translates into a positive for mortgage rates and the Brentwood TN real estate industry.
*Information Courtesy Tonya Esquibel, WRStarkey Mortgage, Franklin TN*
The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
Vanessa Stalets
Brentwood TN Real Estate
RE/MAX Elite
615-957-6333
615-661-4400