Home Loan News

May 24, 2005 LOS ANGELES -- The results of the most recent core reading of the Consumer Price Index (CPI) reveal that the Index of Leading Economic Indicators fell. The drop was the fourth monthly consecutive. Good news for those on the prowl is that long-term mortgage rates dropped last week, making buying a home more appealing. This week we have seen additional drops in 30 year, 15 year and 20 year interest rates.

This week has a number of economic news releases scheduled which should affect mortgage rates. The first, a substantive revision to GDP, is to be released on Thursday. Keep in mind that GDP revisions are usually not too significant. This week, however, analysts anticipate that the GDP is revised from 3.1 percent growth to 3.7. Assuming that economic forecasters are on-track somewhat, we may expect home loan mortgage rates to jaunt slightly upwards. The reason is that the revision would show that the U.S. economy is growing at a healthy pace, and inflation pressure has been set-aside temporarily.

In addition to the GDP revision, the Fed is scheduled to release minutes from its last meeting. This could very potentially be benign if no real economic changes are disclosed. There may, however, be a decline in mortgage rates provided the Fed's minutes show an positive attitude in reference to control of inflation. If this happens it will be as a direct result of bond market players questioning whether or not the Fed will begin to pull-back its reigns on interest rate increases. - By Nolan Voight, Syndicated Mortgage Columnist. We welcome editorial comments, so visitors are encouraged to email Nolan Voight.

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