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Kenton Becker

Kenton Becker,
Sr. Loan Officer
Phone: 206-686-8822
Cell: 206-423-2552
Fax: 206-309-4736
MLO/NMLS #123961
Email Me

22525 SE 64th Place
Suite 220
Issaquah, WA 98027

Events Last Week:

Housing Starts Fell
Philly Fed Down
Jobless Claims Rose
Manufacturing Mixed

Events This Week:

Tues 2/26
Bernanke Speaks
New Home Sales

Wed 2/27
Durable Orders
Pending Sales

Thur 2/28
Chicago PMI

Fri 3/1
ISM Manuf.
Core PCE

landhome landhome

Italian Uncertainty Helps Mortgage Rates

The biggest influence on mortgage rates last week came from the Italian election, which reignited investor concerns about Europe and prompted a flight to safer assets. Fed Chief Bernanke continued to show strong support for the Fed's bond buying program, which was also positive for mortgage rates. As a result, mortgage rates ended the week lower.

The election in Italy showed very close results between the top three candidates, and it will be very difficult to establish a coalition government when no party has a majority. A long period of negotiations will take place, and another election may be required. What is clear is that there is widespread opposition in Italy to the austerity measures supported by the European Union (EU). Investors are concerned that the third largest economy in the EU will scale back reform measures, which could increase the risk that Italy will default on its debt or leave the EU. Investors shifted to safer assets, including US mortgage-backed securities (MBS), which helped mortgage rates improve.

Topping the US economic news last week were the implementation of mandated, across the board, government spending cuts on March 1 at midnight. Government spending will be reduced by $85 billion over the next seven months unless action is taken. While the cuts will slow economic growth to some degree, this represents just 2% of government spending, and the reaction in financial markets has been minimal. Investors are looking ahead to the more significant March 27 deadline. Last year, Congress passed a "stop-gap" continuing resolution to fund the federal government through March 27. New legislation must be passed before then to avert a government shutdown.

Also Notable:
  • Fourth quarter GDP was revised higher to 0.1% from -0.1%
  • Core PCE inflation was just 1.3% higher than one year ago
  • Pending Home Sales rose 5% to the highest level since April 2010
  • Moodys cut the credit rating of the sovereign debt of the UK


Average 30 yr fixed rate:
Last week: +0.02%
This week: -0.07%
Stocks (weekly):
Dow: 14,050 +50
NASDAQ: 3,150 +10

This Week

The biggest economic report this week will be the important Employment data on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, ISM Services will be released on Tuesday. The Fed's Beige Book and Factory Orders will come out on Wednesday. Productivity and the Trade Balance are scheduled for Thursday. Negotiations on the US budget and on Italian leadership could also have a significant impact this week.

©2013 MBSQuoteline

Equal Housing Opportunity Lender. Not a commitment to lend. The accuracy of all information, regardless of source, is not guaranteed and should be personally verified through personal inspection by and/or with the appropriate professionals All material Copyright © Ress No. 1, LTD and may not be reproduced without permission. Land Home only conducts business in states we are approved to. Land Home Financial Services 22525 SE 64th Place, Suite 220, Issaquah, WA 98027. Washington Consumer Loan Branch License #CL-89331. NMLS #89331. Date: 3-04-13. You are receiving this communication because of an existing and/or past business relationship, or because you have consented to receive communications from Land Home.
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