Archive for the ‘Mortgage’ Category
Saturday, April 12th, 2008 |
Chris Jones explains how a huge company like GE can have a significant impact on the stock market and how that affects the mortgage market:
General Electric, a Dow component, submitted earnings this morning and they are HORRIBLE. GE is sort of like the gold standard for the market; they never miss targets, they always manage earnings, and then THIS, and the stock markets are getting hammered as a result. Our pattern continues to hold - bonds fall early in the week and rise later. Yesterday we did get some negative movement and mortgage rates rose slightly, but it looks like that’s all coming back this morning. Nothing earth-shattering, but we’ll have 5.75% par on the 30-year today for good credit borrowers with at least 5% equity and a job.
It seems the mortgage interest rate has bottomed out, in my opinion. We’ve been following this closely for some time, and while it’s not a guarantee, rates may not get much lower. Let me explain. Most people would agree that the economic situation we are facing right now is pretty well known. Sure, another shoe may drop, but everyone is aware that the country is in a downward slope. Rates have climbed slightly since the worst of the slump. They seem to be holding steady and my guess would be they will go up shortly. People are going to make adjustments that put stability back into the market and rates will go back up. Now is the time to take advantage.
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Wednesday, April 9th, 2008 |
More insight from Chris Jones:
An interesting piece of news in the mortgage markets today - CitiGroup announces that they are close to moving a multibillion-dollar package of subprime, prime, and leveraged loans, the kind of deal they were able to do in the blink of an eye last year, and not at all six months ago. That indicates retuning liquidity in the credit markets, and that ought to mean positive things for interest rates. It’s earnings season on Wall Street, and the first day of them was terrible, with a real unlikelihood of anything much better coming over then next couple weeks. That also ought to be good for interest rates.
It looks like rates should remain stable under 6% in the near future.
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Wednesday, April 9th, 2008 |
Nothing brewing today in the mortgage industry. The collective breath of the market is being held on news from the Federal Reserve. Chris Jones explains the most up-to-date happenings:
Earnings downgrades from Alcoa and AMD are hurting the stock market open, and bonds are doing fractionally better this morning. Nothing spectacular, but every little bit helps. The big news today will be the release of the Fed Minutes - that’s right, what matters most to the markets is not the actual results of business decisions, but what the Fed thinks about the economy going forward. The bond market is pricing in a 60% chance of a .50% rate cut when the Fed meets later this month (that will NOT reduce bond rates and will NOT reduce mortgage rates, a thing we’ll explain another day), so we’ll see what the Fed Minutes have to say about the possibility of that. Where the market will go is anyone’s guess.
My guess is we’ll go nowhere today. Right now we’re solidly in the 5.875% area for a 30-year fixed loan for someone with decent credit, some equity, and a job.
If you have any questions regarding the mortgage or real estate industries, please get in touch with us!
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Monday, April 7th, 2008 |
Congress is looking into legislation in the housing and mortgage markets this week. All eyes will be on testimony from the Federal Reserve. Both chairman Bernake and member Richard Fisher will be speaking and investors will be closely following the minutes of their meetings. The stock and bond markets will adjust according to their conclusions. The good news is that the market has remained rather stable. Last week’s jobs report wasn’t great, but it also wasn’t the end of the world. Rates should climb up a bit in the next couple days and level out throughout the week as has been typical.
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Thursday, April 3rd, 2008 |
The mortgage industry seems to follow the “butterfly effect.” The smallest changes in one area can lead to consquences in what kind of mortgage rates we get. Certainly excellent credit is more important now than ever before, with lenders tightening their lending restrictions. Chris Jones comments on the effect the Federal Reserve Chairman has on what the stock and bonds markets do.
New day, new attitude. Chairman Bernanke’s testimony was a mixed bag yesterday, and the markets were slightly disappointed that he didn’t have anything to say about waving a magic wand and fixing things, so the Dow declined, but so did the bond market, neither of them very much. This morning the market is pulling back in stocks and rolling over into bonds, and we’re getting some of our losses back there. This is a pattern, actually - early in the week we lose ground, then get it back later on. So expect things to move a little to the better today.
Still wavering between 5.875% and 6% this morning on the 30-year fixed rate. Please note, PLEASE note, that more than ever before your credit score is the driver on your rate, even on A-paper conforming loans. The negative hits for credit score start at 740.
He goes on to outline the importance of working with professionals during this time of uneasiness. Never has it been more important to have an expert in your corner. Now is the time to take advantage of a buyer’s market and great rates. Give us a call today so we can help keep your best interests safe.
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Thursday, April 3rd, 2008 |
More news in the changing mortgage market. The new quarter has brought stronger investment in stocks and therefore a decrease in capital in the bond market. This means rates will increase somewhat. The window of great rates may not be wide open much longer. Because of tightening credit approval restrictions, many should try to take advantage of the government FHA program to get the most out of the current low interest rates. Here is Chris Jones’ detailed explanation:
Yesterday was the worst day for bonds in two months, as money poured out of the bond market and into stocks, leading to an almost 400-point gain on the Dow. Mortgage rates loosely follow bond rates, which rose from a low of 4.39 on Monday to 4.59 this morning on the 10-year treasury. That’s a gigantic move, and it’s pushed mortgage rates from 5.625% Monday to 6% this morning. I’d love to tell you that that means the worst is over, but I don’t think it is. Until credit markets unfreeze, we’re not going to be able to get substantially lower.
For more information, give us a call and we can help you understand why now is the best time to buy a new home!
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Tuesday, April 1st, 2008 |
More great insight into how the stock and bond markets work together and against each other. With rates as low as they are now and threatening to increase in the near future, it’s important to act quickly. As Chris Jones explains below, time may be running out to get your interest rate locked in below 6%.
First day of the new quarter brings a move higher on the Dow and that’s
taking a lot of money out of bonds. The yield is still good, in the
3.5% range, but there’s still no liquidity in the mortgage market, so
that yield, which would last year have meant mortgage rates in the 5.25%
range, today means 5.75% and moving higher. Bonds are getting killed
today and that’s driving rates up.
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Monday, March 31st, 2008 |
Now seems like the best time ever to become a home owner! Rates are looking better and better for anyone in the market to buy right now. If that’s you, please give The Jimmy Rex Team a call! The Chris Jones Group gives the following insight into how this window of greats rates is fluctuating.
End of the quarter brings us huge news, not all of it good for us in mortgages. The Director of HUD will resign (I would, too) shortly, and that’s supposed to be harmful to the Adminstration’s ability to fight the housing “crisis”. At 10am Treasury Secretary Paulson will unveil a plan to essentially take over Wall Street, and that will be REALLY bad.
Foreign markets are declining, but there are also declines in commodity prices, so the basic order of the day is uncertainty and insome places naked panic.
Panic is good for bonds. What’s good for bonds is good for mortgage rates. This is a red alert day and we’ll see 30-year rates threatening 5.5%. We’ll be on fire here at the Group, calling everyone at this price target, so you might want to call us first - 787-2162 and 310-3407 - but your best bet is either to text me or to reply to this email.
And as always, if you know someone that could benefit from this information, send ‘em along.
Chris Jones
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Jimmy Rex was the Keller Williams Regional Rookie of the Year in 2006 and sold more than 100 homes.