Archive for the 'Interest Rates' Category
The Dow Jones Industrial Average surged 631.86 points in the last three hours of trading yesterday as traders piled into equities.
Fueling the rally? The bond market.
For as much as stocks gained today, bonds lost. Including mortgage bonds. The dramatic sell-off created a huge swing in mortgage rates and erased nearly all of 2008’s rate improvements.
This is one reason why it pays to be aware of your home loan. That way, when markets change and a doorway to payment reduction opens, you can quickly step through it.
As yesterday illustrated, with mortgage rates, opportunity is often fleeting.
With stocks poised to rise again today, it should likely happen at the expense of bonds. Mortgage rates are trending higher, too.
(Image courtesy: The Wall Street Journal Online)
In a surprise move yesterday, the Federal Reserve cut the benchmark Fed Funds Rate by three-quarters of a percent. Mortgage rates fell only slightly as the surprise quickly wore off.
To understand how the element of surprise works in mortgage markets, think about a Jack-in-the-Box.
Everybody knows that the clown is coming, they just don’t know how many turns of the crank it will take. When it pops out, there’s an immediate shock. Then it’s back to business.
This simplified analogy is similar to what happened yesterday, post-rate cut. It’s why many people that expected rates to fall further were dissappointed. Read the rest of this entry »
When the Federal Reserve lowered the Fed Funds Rate by 0.75% yesterday, it was in response to economic weakness that mounted since its last meeting December 11, 2007.
By contrast, the mortgage markets meet every day.
Because of this, mortgage rates had already “priced in” the weakness to which the Fed was reacting.
This is why mortgage rates did not fall by the same 0.75% yesterday — they only fell slightly. Read the rest of this entry »
Interest Rates Have Dropped!! Call 331-LEND (5363) to lower your monthly payment!
The news of 30 year fixed interest rates falling below 6% seems to have been lost in a sea of bad news about the economy and the looming recession everyone is talking about.
For most people we can lower your rate 1% or more. That could mean a savings of $100.00 or more per month at NO cost.
So if you are planning on stying in your home you owe it to yourself to give us a call so we can reduce your monthly mortgage payment. Or simply apply online.
Well the economy has been in a recession for over a year now. As Homer Simpson would say D’oh!
Tucson saw a reduction on the number of homes sold in 2007 over 2006 by 37% fewer transactions. As a result the home inventory levels have risen to 8,708 as of December 2007 which has doubled over the last 2 years. In a healthy Tucson market there are about 3,500 to 4,000 homes on the market.
For detailed residential sales statistics click her: Stats
As many people predicted, Americans really did spend less this past Holiday Season and now mortgage rates are falling because of it.
Weak receipts in December capped off a year in which consumer spending posted its slowest year-over-year growth since 2002.
Because consumer spending makes up two-thirds of the economy, this sort of marked slowdown has farther-reaching implications thanjust at the cash register for U.S. retailers.
Let’s do a quick flashback to mid-October 2007.
At that time, markets were fearful of runaway growth. Mortgage rates were rising and the word “recession” was hardly mentioned in the press. Contrast that to today. Markets are fearful of a complete economic shutdown.
The question most often raised is not “when will the recession start?”, but “how far into the recession are we already?”
This shift in expectations is the biggest reason why mortgage rates have dipped recently.
Read the rest of this entry »
