Monday, August 17, 2009

Oakland, Berkeley, Real Estate: Mortgage Rates snap shot

It is important to point out that“positive” economic news, like improving industrial production or improving employment statistics, usually pushes interest rates higher. Positive reports send signals to the market that the economy is improving and that the Fed may back off from its support of the bond market. I want to remind you that when you see positive reports, you can expect interest rates to rise in most cases.

There is one positive report, however, that does not send rates upward, and that is what we received on Friday. Inflation appears to remain under control. CPI (Consumer Price Index) numbers came in on Friday, indicating prices were flat in July. In addition, the CPI has dropped almost 2% over the last year – the most since 1950.

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