Current VA loan Mortgage rates have been, for all practical purposes, stuck in neutral this week. Even though they have fluctuated a bit in either direction, the net movement has been minor. Today may very well continue that exciting trend. While there is plenty of economic data available today regarding the state of the US economy and news from Europe on its debt and banking crisis, there is really nothing that provides clarity for the future. Nevertheless, for consumers needing a loan for Veterans or Active Duty Service member purchase or refinance, current VA loan mortgage rates remain very attractive.
The key economic report today, like most Thursday’s is the weekly jobless claims report. This report has hung so close to 400,000 new applicants for unemployment benefits for so long that it is almost creepy. How can this measure remain so constant in a country of 300 million? The truth is that I have no idea, but today’s figures once again came in at 402,000. Weird.
In other US economic news today, reports on Existing Home Sales, the Philadelphia Federal Reserve Index (a measure of manufacturing activity in the Philadelphia Federal Reserve Bank region) and the leading economic indicators report are all due at 10 AM. No big changes are expected, but I am wary of the home sales figures and the Philly Fed Index. Anecdotal reports suggest that would-be homebuyers may be waiting until the economy appears more stable. With the Philly report, we are coming off one of the biggest drops ever for this report and it is certainly possible that conditions have not improved for manufacturers. The sharp increase in producer prices reported on Monday may foreshadow trouble for manufacturing.
In Europe most of the news this week has been positive, or at least was interpreted positively. Unfortunately, what we have learned time and time again is that you simply can’t trust statements made by “officials” in Europe. At the beginning of the week markets reacted favorably to news that France and Germany had reached agreement on the best use of the European Financial Stability Fund. Today we learn that, in fact, these two key nations have not agreed on how to utilize this tool to support troubled sovereign nations. Needless to say, this does not sit well with market traders.
Today will likely be volatile and VA loan mortgage backed securities markets may move significantly. I think, however, that lenders will be wary of changing their pricing without a clear, sustainable direction. While clarity may develop today I expect it will not and mortgage rates will remain close to current levels.
VA Loan mortgage rates were little changed, keeping borrowing costs close to the lowest level on record as demand for home loans slumps.
Current VA loan rate for a 30 year fixed VA loan declined to 4.11 percent in the week ended today from 4.12 percent, Veteran Loan Administration said in a statement today. The average 15 year rate VA Loan increased to 3.38 percent from 3.37 percent, according to the Veteran Loan Administration. The longer term lending rate fell to 3.94 percent two weeks ago, the lowest level in Veteran Loan Administration records dating back to 1971.
Americans remain cautious about buying homes as property values decline, lenders tighten credit and the jobless rate sticks above 9 percent. Mortgage applications dropped 15 percent in the period week Oct. 14, the biggest decline this year, according to a Mortgage Bankers Association index. A gauge of refinancing tumbled 17 percent and the purchasing measure fell 8.8 percent, the most in two months.
“If you look at mortgage applications, the low interest rates have done nothing to stimulate housing,” said John Russell, Vice President of Mortgage Banker All American Lending Inc in Newport Beach California. “The single-family home market is stuck at the bottom.”
Sales of previously owned homes fell 3 percent to a 4.91 million annual rate in September, figures from the National Association of Realtors showed today. The median price declined 3.5 percent from a year earlier. Transactions involving financially distressed properties -- comprising foreclosures and short sales, where the price is less than the loan balance -- accounted for 30 percent of the total.
Builders began work on more U.S. homes than forecast in September, largely because of a surge in construction of apartments and other multifamily dwellings, Commerce Department data showed yesterday. Single-family housing starts climbed 1.7 percent from the previous month while work on multifamily homes surged 51 percent.
The Standard & Poor’s 1500 Homebuilding Index rose the most in two years on Oct. 18 after a measure of developer sentiment unexpectedly increased to its highest level since May 2010. The National Association of Home Builders/Wells Fargo index climbed to 18 in October from 14 the previous month, the Washington- based group showed. Readings below 50 mean more respondents said conditions were poor.