With little economic data on the schedule for last week, the major economic story during the week was the continued rise in oil prices, which hit a new record high of $126 per barrel. Oil prices have nearly doubled since last summer. A major Wall Street investment bank issued a forecast this week that predicted a spike in oil prices to between $150 and $200 per barrel, possibly before the end of the year.

The impact of rising oil prices on mortgage markets could be either positive or negative, depending on a couple of factors. Rising oil prices lead to higher prices for goods and services, and higher inflation usually leads to higher mortgage rates. On the other hand, higher energy costs slow economic activity, which serves to reduce inflationary pressures. In general, stock investors don’t like to see higher oil prices, while mortgage investors are less concerned. Delaware Mortgage Rates ended the week about where they started.

In the housing sector, the March Pending Home Sales index fell slightly from February, matching expectations. Pending Home Sales are a leading indicator of future housing market activity, so the next Existing and New Home Sales reports may show small declines. The National Association of Realtors (NAR) latest forecast predicted that conditions will remain soft for the first half of 2008, but that activity will pick up during the second half of the year.

Other significant news for the housing sector came out during the week as well. Fannie Mae announced that it will buy the new Jumbo Conforming mortgages for the same prices as those below the old conforming loan limit, which should make some larger mortgages more affordable. In addition, a $300 billion FHA housing loan guarantee program passed a vote in the House. More hurdles remain, as the program must be approved by the Senate and the President. If passed, this program will assist troubled borrowers in refinancing into a mortgage with more affordable terms, resulting in a reduction in the number of foreclosures.

This week will kick off with the Retail Sales report on Tuesday. Consumers account for about 70% of economic activity, and this report is a major indicator of spending levels by consumers. The most highly anticipated economic data will be Wednesday’s Consumer Price Index (CPI) inflation data. Almost without exception, higher inflation leads to higher interest rates, and CPI looks at the price change for those finished goods which are sold to consumers. Industrial Production, an important indicator of economic activity, will come out on Thursday. Housing Starts and Consumer Sentiment will round out a full schedule on Friday.

If you need help with a Home Loan, please contact me (John R. Thomas) at 302-368-7132 or you can APPLY ONLINE HERE.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713