The Senate approved the extension this morning after it passed through the House of Representatives. I just saw the news on the wire a few minutes ago. It is NOW official. I believe the projected extension date was to be September 30.
Remember that this is only for home buyers who were under contract by April 30 to purchase a home.
Rates are at LOWEST EVER again... Sometimes this feels like we are a furniture store going out of business. You know, the ones with the "everything must go" or "complete liquidation" labels emblazoned on their front windows for months at a time. It seems to go on and on...but don't be fooled.
What is driving it? Not the feds anymore...directly anymore. They stopped buying Mortgage Backed Securities a few months ago. It is actually the NEED for relatively safe places to put money. There is no safety in the volatile gold, oil or commodities market as we have seen violent price shifting there in the past.
Interestingly, this is the same contributing factor to the run-up that became the mortgage meltdown. How? The world needed a parking space for it's wealth at the turn of this century and created a HUGE demand for the limited supply of Mortgage Backed Securities, bonds and T-notes (like there is now). The difference then: the powers that be decided to ADD SUPPLY of mortgage backed securities to meet the demand. The only way to add supply was to do more mortgages for more people...even people who didn't qualify at that time. They "lightened up" the guidelines and continued to do that until we were eventually using the "pulse" and "ability to fog a mirror" to qualify some borrowers in this industry. What a mess. Granted, this is only a contributing factor (increase supply to meet overwhelming demand). Rates were kept lower then.
NOW: We will NOT increase supply of Mortgage Backed Securities with lighter guidelines at least for a few more years so the lack of supply meeting overwhelming demand is keeping the rates at lowest levels in history.
FNMA 4.0% bond IS actually off best levels today though. WE are DOWN 25 basis points on that one. I would expect pricing to get a little worse this afternoon but for now the 30 year fixed loan is in that sweet spot of 4.375-ish making homes very affordable.
Cheers!
Chad
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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com
