ArchivesThe Conventional 15 year fixed rate dropped slightly to 3.375%, assuming the same parameters as mentioned above.
SHOULD I LOCK OR FLOAT?
Market conditions are less volatile than at the end of last week. It is safer to float your rate today than it was last Friday, but there is still some risk involved. If you are not risk averse, then go ahead and float your rate. If you are more conservative, then lock it in.
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( 2.9 / 1198 )Boy was there was some upward pressure on interest rates today. There wasn't any good news when it came to rates, with the Conventional 30 year fixed rate rising to 4.375%. This rate would be available for a borrower who has excellent credit (credit score of 740 or greater) and could be obtained with little or no points if you make the right size of down payment.
The Conventional 15 year fixed rate rose to 3.50%, assuming the same parameters as mentioned above.
SHOULD I LOCK OR FLOAT?
Market conditions are reasonably volatile at the moment, but we may see things calm down somewhat next week. Monday is a Federal holiday, so the markets are closed. Once all of the data from the Jos Report is disected, we may see some improvement in rates. I don't know if it's really safe to float at the moment, but we may have seen the wrost of it today. If you have a strong stomach, then assume the rate risk and float your rate. If you are somwhat more conservative, then lock it in.
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( 3 / 1602 )Friday morning we get to see how many non-farm job's were created in the month of October. Remember The Shutdown? Wasn't nearly as great a show as Rmember The Titans (great movie with Denzel Washington), was it? Most mortgage market experts believe The Shutdown will cause the Non-Farm Payroll figure to be around 130,000. If the number is close to 130K, then mortgage interest rates should remain at their current levels. A figure around 120,000 should cause the mortgage market to rally and rates to drop. Anything at 140,000 and above will likely cause a sell-off in the mortgage market and rates will increase.
My guesstimate is a headline number at or below 130,000. I just do not see much job creation, especially during the first half of October during The Shutdown. Private businesses were at risk of closing due to lost revenue because there were so many Federal employees that could not spend money they didn't have.
Now, what will happen to the Unemployment rate? Consensus is a rate of 7.2%. I have continued to be a critic of the method of calculation that is used to determine the number. If we are only counting the people that are receiving benefits, how can the number be accurate? What about the thousands of people that no longer receive benefits? Aren't they still unemployed? Shouldn't they be included in the unemployement rate?
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( 3 / 1682 )Well, it doesn't appear that forecosures are done. I read the legal section in our local paper at the end of last week and found 17 foreclosures listed. That doesn't seem like many, but it's an increase from a few months ago. The information that I've gathered leads me to beleive that there are many more to come.
I know of many instances where a property owner hasn't made a payment in 36 to 48 months, but the lender still hasn't foreclosed. I do understand that once they foreclose, they have to take the loss and then carry the asset on their books until the property is sold. There are many other properties that have gone to foreclosure sale, but are not presently listed for sale with local Realtors.
I understand that the lenders, which are typically big banks (Chase, BofA, etc.) don't want to flood a market with too many of their REO (real estate owned) properties because they would be competing with themselves and drive the prices down even further. Drawing out the amount of time it will take to work through all of the foreclsoures is good for potential buyers, because it gives them a little more time to prepare to purchase that new primary home or the vacation home they've always dreamed about. It isn't good, however, for current property owners who would like to see some appreciation of their properties so they can withdraw equity to make home imnprovements, pay for college, or a myriad of other things.
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( 3 / 1930 )"A very long time," according to Bryan McNee, vice president and senior bond analyst for MBSAuthority.com. "The market still widely believes that the Federal Reserve will be unable to begin tapering their massive bond purchases until at least June 2104," McNee told MBA. "That's quite interesting, becaue keep in mind we have our latest budget ceiling in February where (Congress) is going to have to renegotiate again, and the Fed will have to react to that."
I find McNee's comments refreshing. I'm glad that someone has decided to comment on the possibility that the will have to continue their purchase program for an extended period of time. Maybe now we can stop all of the hand-wringing over Tapering and we can all get back to buying homes and providing mortgages.
Stay tuned for more of McNee later in the week. I think I like this guy.
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