Market Insight
Have you metChad?
Have you metChad?
FNMA 4.5% lost some ground today (down 47bps!)...but still at historic levels. This bond along with others Drifting down dramatically in today's session caused a mid-day rate increase for most of us in lenderland. STILL PHENOMENAL rates available for FHA, VA, RD, CONVENTIONAL and JUMBO loans available at Metlife Home loans among other top lenders though.
Remember the 97BILLION in treasury notes that were being auctioned off this week? $32 billion in 5 year t-notes was on the block today...with a very ENCOURAGING foreign participation level of 48.9%...(normal is around 30%).
There is currently an estimated 9.6 month of "supply" on the market...due to longer sales cycles. The "supply" expressed as a "TIME" is actually UP despite less inventory. People are just taking longer to make up their mind about purchasing a home in this "environment". Some are waiting for better deals, some are waiting for the right property and some are just scared to make a move...know anyone like that? The other reason I have to assume is that purchasing a
home is no longer a 2-3 year decision...people are looking to STAY in their homes for 10 years now according to a recent article I came across. (WHAT? We didn't "go for it" when the rate was at 4.5 %????) I am afraid the issue is deeper than the interest rate. The difference in payment for every 1/8% in rate is only worth about 7 to 8 CENTS per thousand borrowed.
DOW is down 80 points after today’s session and getting teeth clatteringly close to the 7000 point mark at 7270. S&P lost 8 points today and the NASDAQ closed down 16. Investors are
wondering again how we are going to pay for all the magical programs that seem to be “on the horizon” in addition to the latest array of financial commitments in the stimulus.
BANKS nationalization rumors were quelled today by comments made in Bernanke's speech... He alluded to the idea that companies getting government help should cut their dividends to share holders.
Have a GREAT evening!!
P.S. these MI's are archived for the most part at http://www.chadcan.com/ so feel free to check it out! (I would encourage you to invite your friends and family to check it out. I feel that education on current issues is a person's first line of "emotional defense" against all
the doom and gloom. Cheers!
--
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
Tomorrow another 22 BILLION dollars worth of 7-year notes will be auctioned off further adding to the perception of an "over supply" in the bond market. (7-year notes have not been auctioned since 1993 due to a general poor reception by investors.) Insight: in addition to the perception of an over supply with a slew of t-note auctions like this...when investors note that the bond auctions are "poorly received"...or auctions show a "weaker" demand...it tends to "spook" those who would have otherwise invested. The "BANDWAGON" or "HERD" mentality is alive and well...and okay...just something to note. Investor "ANXIETY" from the "perception" that "others are anxious so I should be too" has caused much of the volatility in our markets over the last several months.
Note also that when bonds are selling...so are Mortgage backed securities. The bond and securities markets tend to mirror each other. This is because they attract similar investors: (smaller return + relatively low risk = safety seekers) HOWEVER: mortgage rates are DIRECTLY tied to mortgage backed securities. Feel free to again check out the credit crisis explained video if you would like...see if you can spot the appearance and conveyance of what we know to be "mortgage backed securities". (I understand that the first link from yesterday
didn't work...cut and paste this one if you would like: http://www.youtube.com/watch?v=Q0zEXdDO5JU )
WOW...despite the INCREDIBLE rate environment: "existing home" sales fell 5.3% in January...to a near 12 year LOW. Flip side: with less construction "starts" inventory is actually starting to get soaked up...which is just what we need. (Inventory of unsold homes fell about
3%).
Note also that when bonds are selling...so are Mortgage backed securities. The bond and securities markets tend to mirror each other. This is because they attract similar investors: (smaller return + relatively low risk = safety seekers) HOWEVER: mortgage rates are DIRECTLY tied to mortgage backed securities. Feel free to again check out the credit crisis explained video if you would like...see if you can spot the appearance and conveyance of what we know to be "mortgage backed securities". (I understand that the first link from yesterday
didn't work...cut and paste this one if you would like: http://www.youtube.com/watch?v=Q0zEXdDO5JU )
WOW...despite the INCREDIBLE rate environment: "existing home" sales fell 5.3% in January...to a near 12 year LOW. Flip side: with less construction "starts" inventory is actually starting to get soaked up...which is just what we need. (Inventory of unsold homes fell about
3%).
There is currently an estimated 9.6 month of "supply" on the market...due to longer sales cycles. The "supply" expressed as a "TIME" is actually UP despite less inventory. People are just taking longer to make up their mind about purchasing a home in this "environment". Some are waiting for better deals, some are waiting for the right property and some are just scared to make a move...know anyone like that? The other reason I have to assume is that purchasing a
home is no longer a 2-3 year decision...people are looking to STAY in their homes for 10 years now according to a recent article I came across. (WHAT? We didn't "go for it" when the rate was at 4.5 %????) I am afraid the issue is deeper than the interest rate. The difference in payment for every 1/8% in rate is only worth about 7 to 8 CENTS per thousand borrowed.
DOW is down 80 points after today’s session and getting teeth clatteringly close to the 7000 point mark at 7270. S&P lost 8 points today and the NASDAQ closed down 16. Investors are
wondering again how we are going to pay for all the magical programs that seem to be “on the horizon” in addition to the latest array of financial commitments in the stimulus.
BANKS nationalization rumors were quelled today by comments made in Bernanke's speech... He alluded to the idea that companies getting government help should cut their dividends to share holders.
Have a GREAT evening!!
P.S. these MI's are archived for the most part at http://www.chadcan.com/ so feel free to check it out! (I would encourage you to invite your friends and family to check it out. I feel that education on current issues is a person's first line of "emotional defense" against all
the doom and gloom. Cheers!
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
