WOW! Great day for bonds…mortgages…bottom of housing market in sight?

http://www.metchad.com/

Have you metChad?

Rates go up for condos...adding 3/4 point to "pricing" tomorrow for conventional loans on them with over 75% loan-to-value.

FNMA 4.0% : JUMPED 28 bps…to close at $100.19 and REALLY jumped earlier with a RECORD $40 BILLION dollar auction of 2-year t-notes that went really well. (Highest demand noted since November 2007!) Foreign participation came in at over 34% which is back to normal levels. (Yesterday's TIPS auction had over 50% foreign participation.) Foreign participation supports the notion that confidence in continued level inflation numbers or stability of the dollar vs. other currencies will continue…YEAH! Remember: MOST of the market is psychology…so this is good news for now.

DOW: Reacted to positive earnings reports from companies like Netflix, Texas Instruments and US Steele. Hanging in there at just over 8000 points.

DJIA 8,174.73 +58.70 NASDAQ 1,504.90 +15.44 SP500 845.71 +9.14

Case Shiller HOME price index: Showed an 18.2% decrease in home prices last year…yikes! Good news though: analyst Jack Albin in taking a look at home prices VS. the "CPI" (Consumer Price Index) is showing that home prices are "fair" and in proportion to the prices of everything else. Jack Albin of Harris Private Bank in Chicago was also quoted today as concluding: 'worst is over in housing market'.

Evidence? Mortgage Default notices for California homeowners declined 20.2% in Q4 from Q3 and decline 7.7% from year earlier. (Factoid: if California was a country: it would have the 8^th LARGEST economy in the world…so when they recover it is good for many.)

YOW! Consumer confidence hits a LOW… Remember though: many of these reports such as the consumer confidence index are just based on "opinions" of people surveyed. It is our job to stay above that and come to an educated understanding of what IS truly positive right now. Example: more people are staying HOME right now…so Yellowstone Park had the highest attendance numbers EVER with all the local tourists. The success of the park was also augmented by the strength of other currencies which brought more foreigners than ever to spend money in our country this summer. Q4 reporting from Netflix is showing a 45% increase in production…suggesting that more people are seeking entertainment at home with their families. Spa's, health clubs and art/culture centered events are enjoying greater success as people are finding well being outside of the grind and appropriating money differently….Hmmm.

For those who heard us on the radio and provided some valuable feedback: Thanks!

Havagreatday,

--
Chad Schauers
Have you metChad?
MetLife Home Loans
406.522.0922
406.522.0924 (fax)
1924 W. Stevens, Ste. 202

Bozeman, MT 59718

Cell: 406 799 8613
ccschauers@metlifehomeloans.com