FNMA 3.5% bond is steady ($100.66, up zero bps on the day) after a disappointing reading with the existing home sales report yesterday and more disappointing New home sales report today. In fact: the new home sales as reported are some of the lowest on record. 276,000 were reported vs. the 334,000 that were expected. Also, today's t-note auction was rated a "C-" due to signs that there is a lower demand for the instrument. Some of this is due to constant worry about the decline in the value of the dollar. Remember that when the dollar is "devalued" we have inflation. With a devalued dollar and a fixed return investment: inflation EATS up your profits. (Example: if you were making 50 dollars a month off of a fixed return investment and the price of groceries goes up by $100 due to weakness in the dollar. OR If you convert that $50 into YEN and the weakness of the dollar give you LESS yen for $50 US.)
Durable goods orders were also reported this morning. This came out with a number that was about 10 times less than what was expected reporting a 0.3% increase vs a 3.0% increase in orders.
Remember that it is "expectation" that drives the markets. That is where the "buy on the rumor and sell on the news" cliche comes from.
Rates are steady for now at historic low levels. It could be a good time to think about refinancing your JUMBO loans. I have been having some great luck with those lately and would be happy to
visit with you or yours at earliest convenience. Jumbo rates have relaxed to levels not seen for some time especially on the intermediate ARM products. Borrowers will need to have at least a 680 credit score and a loan-to-value of less than or equal to about 75% depending on your lender. (*** What a great reason to re-connect with your clients and see how they are doing!) I have run scenarios lately that are saving home owners up to $1200/month in payment. This is nothing to sneeze at.
Be sure to check out the "appreciation" graphic below. There are some surprises on there.
Cheers!
Chad
The NEW FHFA Home Price Index Report for Q2-2010
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Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com
