A Fed forecast, early in the week, that inflation should remain low for the next couple of years moved mortgage rates lower. Later in the week the economic news was less favorable. Strong earnings reports produced a stock market rally, which pushed our rates higher. Also the June Existing Home Sales report contained positive news for the third straight month, climbing 4%. The inventory of unsold homes fell to a 9.4 month supply, from 9.8% in May. And the national median home price rose 4% in May. According to the National Association of Realtors, home sales were helped by the first-time buyer Tax Credit and Historically high affordability conditions. As for mortgage rates, pricing ended this week close to the level of last week. Conforming conventional, with higher credit scores, 740, and higher loan balances ended at 5%, with government rates improving to 5.5%. Next week New Home Sales is due out Monday, Consumer Confidence is due out Tuesday, Durable Orders Wednesday, and GDP due out Friday. I think that we should expect the market to continue like this week, with some quick ups and downs.

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