Mortgage Rates
Early in the week, a forecast from the Fed that inflation should remain low for the next couple of years moved mortgage rates lower. The economic news later in the week was less favorable for mortgage rates, however. Strong earnings reports produced a rally in the stock market, which pushed mortgage rates higher. In the end, mortgage rates finished the week essentially unchanged.

In testimony before Congress on Tuesday, Fed Chairman Bernanke provided an update on the Fed's outlook for economic conditions. Of note, Bernanke predicted that inflation will not be a concern any time soon, which was good news for mortgage rates. While he expects economic growth to turn positive later this year, he suggested that the labor market may be weak for several years. As a result, the fed funds rate will likely remain near zero for "an extended period".

The June Existing Home Sales report contained positive news for the housing market. In June, Existing Home Sales rose for the third straight month, climbing 4%. The inventory of unsold existing homes fell to a 9.4-month supply from a 9.8-month supply in May. The national median home price rose 4% from May. According to the National Association of Realtors (NAR), home sales were helped by the first-time homebuyer tax credit and "historically high affordability conditions".

John Holbrook - Realtor 904-415-0171 Fernandina beach, FL 32034