Rain Ruins Weekend plus Urgent News for Buyers

They say rain is good in dry Southern California. My Saturday was rained-out. I had planned for an open house in Stevenson Ranch area of Santa Clarita for a fellow Realtor, but with the rain, everyone stayed home.

Buyers: economic signs may signal interest rates rise in the near-term. Lock in your best rate now and start shopping for your new home.

The Fed meets this week. CNN states, "there is a growing sense that the Fed may keep rates at 5.25 percent for the foreseeable future." As I stated in a prior post, most people think mortgage rates as being closely linked to the Fed's decisions, they're more closely linked to the bond market.

Last week, stronger than expected economic reports hit the wires, indicating a resilient economy: the inflation measuring Consumer and Producer Price Indexes (CPI and PPI) both were hotter than expected, showing some lingering inflation in the economy; Housing Starts and Building Permits were both reported as better than anticipated; Initial Jobless Claims were lower than expected, indicating a strong labor market; the Philadelphia Fed Manufacturing Index was higher than estimated; and to top off the week, the Consumer Sentiment Index came in very strong - a three year high!

We would therefore expect bond prices and home loan rates to rise. With all this strong economic news, it's surprising that Bond prices and home loan rates just stood there. Despite some midweek bouncing around on the news, Bonds and home loan rates ended up the week only slightly worse than where they started.

It's time for buyers to get off the fence and lock in loans - and shop for their new home!