Poised for Another Run
Posted On: June 25th, 2009 by James Posted In: Mortgage Rates • Portland Real Estate
“Who let the dogs out?!” That is the song that comes to mind when looking at the bond page today. My sense is that after a few weeks of rates in the mid 5% range, forces are aligning to have us make another run into the high 4% mortgage rate territory again. The bond market positively ENGULFED 100 billion dollars of Treasury Bonds this week, and is now rocketing skyward. And if you’ve been following this blog you’ll know that when the bond market goes UP… Mortgage rates come DOWN.
The only thing that had been holding this back was the 3 separate treasury auctions. Now that they are behind us, I am feeling like this is a recipe for another run at lower rates.
Continue Reading – Poised for Another Run
Watching the Sausage Get Made
Posted On: June 20th, 2009 by James Posted In: Government Actions • Mortgage Programs • Mortgage Rates
Ok…. Another blog post about this Government Tax credit! First HUD chief says ‘you can monetize this 8k’ and get immediate access to it. Then they say: “forget it, Just get be happy with the tax credit people!”…. THEN I hear rumors about “immediate access to the $8k credit, BUT ONLY if applied to closing costs… NOT downpayment“. Well good readers, I just come across these articles, and in an attempt to make my site a relevant place to get the latest answers to your burning mortgage questions, I post them.
I saw this VERY interesting article on Bloomberg about a new push to INCREASE this Tax credit to $15K! This was the amount suggested by the House in the first version of the bill that now gets us the $8000.00 Tax credit we now love. The second thing to note in this article is that congress wants the Fed to continue to purchase treasuries towards the goal of keeping fixed mortgage rates BELOW 5%. To me this is very exciting rhetoric…. I hope the Fed announces that they will continue to purchase, or even increase their purchases at the end of this month’s FOMC meeting.
The current volatility is giving me gray hair on my head.
Wild Swings and Volatility
Posted On: June 18th, 2009 by James Posted In: Government Actions • Mortgage Programs • Mortgage Rates
Early June saw our Mortgage bond market drive rates up like a Rocket!…. but this was followed by a huge rally in the second week of June that gained back 50-70% of those losses. Yesterday showed us breaking through all kinds of market barriers and showing lots of strength and momentum. However, we did end on a late day slide. And this morning I awake to a very angry and moody bond market. Another huge slide putting pressure on mortgage rates. We will see some more worsening and hopefully some balancing here, but rates changing .25% in a matter of hours will likely be our market for the coming days and weeks. The rates are still VERY favorable … in the low 5% range and mid 5% range for FHA, but the volatility is creating problems with managing the expectations of borrowers. Hang on tight, and make sure that if you are looking for a mortgage, that you are working with an experienced professional who can help guide you through these very choppy waters.
Best Podcast EVER?
Posted On: June 12th, 2009 by James Posted In: Local Interest • Portland Real Estate
Well the NPR radio show “This American Life” has done it again. They have created another program that clearly explains how complex the financial crisis is, and why it is so difficult to point the finger at any specific agency or company. Please do yourself a favor and make time to listen to this one hour podcast, stream it over the web or copy it into your mp3 player of choice. I learned so much from it.
They explain that a huge part of the problem lies in the role that ratings agencies (Moodys, Standard & Poors etc) currently have. In the late 30’s the FDR administration made it a law that any big pension fund or retirement fund making investments could ONLY purchase bonds that were AAA rated. That AAA rating is a virtual guarantee that the money would be paid back to the bond holder. Well, all of the subprime mortgage backed bonds got this AAA rating, and then got downgraded to B’s and C’s. When this happened all of the pension funds were LEGALLY REQUIRED to sell them ALL AT THE SAME TIME! So we all know what happens to the price of a thing when everyone is selling and literally NOBODY is buying. The price plummets.
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Mortgage Rates Getting Blasted!
Posted On: June 5th, 2009 by James Posted In: Mortgage Rates
Mortgage rates continue to spike in this first week of June. Since the bond market slipped early last week, we’re now about a full percentage point higher on 30 year fixed rates. Why is this happening? I’m not sure, most indicators did not prepare me for what we now have, and a big part of me feels like this is an irrational swing. There has been a lot of optimism, and a new appetite for risk in the marketplace. This appetite, is pulling traders out of their bond positions and into the surging equity markets. When you combine this with the US Treasury also FLOODING the bond market with over 100 BILLION dollars of new debt issues, you can see where this is going. One piece of slightly good news is that the Treasury has announced that they will greatly scale back future debt issuance in coming weeks which should provide some brakes on this potentially runaway train.
Continue Reading – Mortgage Rates Getting Blasted!
