Weekly Mortgage Update
| This week’s housing numbers were as you would expect following the end of the government’s incentive program. While the program’s ‘final closing deadline’ was extended, many of the sales and closings that would have occurred in the summer were pushed into the ‘pre-June’ months. So, housing sales slowed, housing starts slowed, and building permits increased a just bit indicating a rebuilding of inventory. All of this was expected and didn’t impact rates much.
What DID impact rates was the ‘flight to safety’ effect that I have mentioned before. Even though 75% of the S&P 500 companies reporting beat earnings estimates (the historic average is 62%), IBM and Goldman both disappointed. Combine this with Bernanke’s ‘unusually uncertain’ comment, and you have a good recipe for fear. Fear drives investors to safety, which is found in bonds. Remember, mortgages are bonds. This influx caused rates to drop BACK to last week’s levels, keeping us in a narrow trading range. One note of caution, a clear majority of the EU banks passed the stress test, and as Europe improves, money will start to flow out of the US bond market creating the opposite effect of the ‘flight to safety’. So if you are a buyer … don’t get greedy and grab this opportunity. This week 30 yr fixed rates ranged between 4.25% and 4.5% depending on program, credit and points. STATE BOND MONEY STILL AVAILABLE WITH A RATE OF 5.25% AND 3.5% DPA
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| Ted Clay Sr. Loan Officer NMLSR # 217991 OK License # MLO01963 Office: 405-341-8644 |