Brentwood TN Homes for Sale and Real Estate

Brentwood TN Real Estate: Finance Market Update June 30th, 2008

Brentwood TN Real Estate

Mortgage bond prices fell slightly applying upward pressure on mortgage interest rates. Trading remains extremely volatile. Inflation fears were fanned once again as oil prices moved into uncharted territory. Bonds found some support when the Dow Jones index fell 358 points to 2008 lows on Thursday. The Federal Reserve, expressing growing concern about inflation, brought a halt to its aggressive campaign of interest rate cuts. For the week, interest rates on government and conventional loans rose by 1/8th of a discount point.

The employment report to be released Thursday will be the most important event this week. The bond market will close early Thursday afternoon ahead of the Independence Holiday Friday. This shortened trading day may lead to market volatility as traders position themselves ahead of the extended holiday weekend.

Economic Weakness

The Federal Reserve has turned away from stimulating the economy to a real concern regarding inflation. Many analysts predict Fed rate increases are on the horizon.

If future data shows signs of inflationary pressures increasing the Fed may be forced to raise rates. How that will affect mortgage interest rates is debated, but an inflationary environment is generally not good for debt instruments. Some argue that rates would more than likely spike in the short term but over the course of time could improve.

The fact of the matter remains that trading continues to be data and psychologically driven. There are numerous economic releases this week that have the potential to result in mortgage interest rate volatility. Remember, floating in front of the releases can often be risky. If the data shows signs of economic slowdown mortgage interest rates may improve. However, signs of economic strength or inflation could cause a spike in mortgage interest rates. A cautious approach to float/lock decisions remains necessary to take advantage of mortgage interest rates at the current favorable levels.

*Courtesy Tonya Esqubel, WR Starkey Mortgage, Franklin TN*
Permission to re-publish. 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 Homes

RE/MAX Elite

615-661-4400

Published Monday, June 30, 2008 1:57 PM by Vanessa Stalets