• The Fed’s favorite inflation gauge, the annual Core PCE, was unchanged in September at 2% while month over month saw a rise of 0.2%. Remember, the Fed has forecasted Core PCE to run near current levels through 2021.  If that forecast is accurate, long-term rates like mortgages, can’t move too high.
  • Personal Spending rose 0.4% in September, above expectations while August was revised higher.
  • Personal income only rose 0.2% in September.
  • Consumer Confidence hit a new record high in October at 137.9, up from 135.3 in September.
  • The 3rd quarter Employment Cost Index rose 0.8%. This report was Alan Greenspan’s favorite inflation gauge.
  • Europe reported its slowest level of economic growth in 5 years last week. Thus, don’t expect the ECB to raise rates in Europe. This should help keep a lid on how high our interest rates go. Currently, the 10 year German Bund is just yielding 0.37%.
  • But, the U.S. is growing strongly and thus the Dollar is appreciating and a stronger Dollar will help keep our rates from rising too far.

 

Rate Update–

  • Conventional 30 year 5.25%/APR 5.367%
  • FHA 30 year 5.00%/APR 5.94%
  • FHA 30 year with a 580 Fico Score 5.75%/APR 7.054%
  • FHA 30 year with a 550 Fico Score 5.875%/APR 7.179%
  • VA 30 year 5.00%/APR 5.21%
  • VA 30 year with 550 Fico Score 5.875%/APR 6.335%
  • CHFA First Step (FHA loan) Down Payment Assistance Program 30 year fixed at 5.125%/6.165%
  • CHFA Conventional Down Payment Assistance Program 30 year fixed at 5.375%/APR 5.970%
  • Conventional 3% down with NO PMI 5.75%/APR 5.923%
  • Jumbo 30 year 4.75%/ APR 4.867%
  • Jumbo 7/1 ARM 4.25%/ APR 4.25%