Austin Mortgage Rates. Week of 12-7-09.

Austin Mortgage Rates: Week of 12-7-09.

The national Freddie Mac 30-year fixed rate for the week of 12.07.09 was 4.81%, up approximately .125% from the previous week. Austin mortgage rates fall under Freddie Mac's southwest region's rate of 4.83%. Look to the right for Freddie Mac's interest rate chart for the last year -->.

So why did rates increase last week? The Treasury auctioned off 10-year and 30-year treasuries last week, which compete directly with mortgage-backed securities for buyers. This competition increases the supply of mortgage-backed securities, and Economics 101 tells us when supply increases, prices drop. When prices of mortgage-backed securities drop, mortgage rates go up.

Forecast for the week

This week brings a lot of economic news that may affect Austin mortgage rates. First, Tuesday brings the Producer Price Index report which measures inflation at the wholesale level, and Wednesday brings the Consumer Price Index report which measures consumer prices. Both reports give us an indication of inflation (or lack thereof). Why is inflation important to mortgage rates? Because inflation is the arch-enemy of mortgage rates – as inflation increases, so do Austin mortgage rates.

On Wednesday we’ll also hear how well the housing market is doing, with a read on Building Permits and Housing Starts. The Federal Reserve will also issue its Interest Rate Decision and Policy Statement on Wednesday. A change in rates is not expected, but we should still keep an attentive ear to what the Federal Reserve says in its policy statement as it has the ability to move markets, and cause a change in Austin mortgage rates.

Remember, generally speaking, better than expected economic news causes rates to increase, and visa versa.

Interested in semi-frequent updates on Austin mortgage rates, real estate news and commentary? Contact me or Follow me on Twitter!

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Nicole Lahti is a Loan Officer in Austin, Texas. Contact Nicole at nicole@nicolelahti.com, or 512-507-8312.

Austin Mortgage Rates. Week of 12-7-09.