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Mortgage Rates and What May Move Them This Week: July 6, 2010.

By
Mortgage and Lending with CMG Home Loans NMLS 248937

 Yes, you heard it Correctly: We have hit Record Lows for Mortgages

Last week interest rates continued to improve slightly with Fannies gaining 9/32nds for the week keeping rates at historically low levels. All I can say is "WOW" every time I lock in a 30 year fixed rate in the 4's.  My advice has been to lock it in and don't look back, these are truly generational lows that we probably will not see again. The minute that the economy shows sustainable growth rates will pop like the fireworks you saw last weekend.  Last weeks "biggie was the employment report which had some mixed news. At first it looked good (which is bad for rates). The employment rate went down while the economy lost 125k jobs... digging a little you can see that people fell off the unemployment rolls and gave up looking for jobs, so the reality is that the employment picture is still far from Rosy.

Last week we also saw an extension of the NFIP, and the closing date for the first time buyers that missed the June 30 deadline was extended as well, So there is some good news. Lets just hope that our law makers in DC stop tossing around the political foot balls and get the job done. The Flood Extension was JUST an extension, and we went without flood insurance being available for 2 months as that foot ball was tossed about after the previous extension expired, and as of 9/30/2010 we will not have flood insurance again unless they fix it... So pay attention, there is a lot of Great Real Estate in this country that requires flood insurance to close.

This weeks calendar is a short one, and not just because Monday was a Federal holiday.  Here is what we have in store for the week

  • Tuesday July 6: Institute of supply Management, Service Sector, Expected at 55.0%. This number was expected to be down a bit since last month, but it actually came in much lower at 53.8% Keep in mind that we are a service based economy, so that is a big hit to 90% of our economic base. On the news we have mortgages trading up a bit and may see some small improvements to rates
  • Wednesday July 7: a no news day
  • Thursday July 8: Initial Jobless claims expected down 7,000. This keeps the jobless number around 465k, well above the 400k we would need to see as any sign of a solid jobs number. It is not likely that this will be a market mover with the holiday weekend and seasonal adjustments that will make interpretations of the report confusing.
  • Friday July 9: May Wholesale Inventories expected +0.4%. This is a bit stale, and matches last month, it is not a likely market mover.

That's it, just 3 things??? I told you it was a quiet calendar this week!  It's too darn hot out for Economic data anyway. 

Last week we hit record lows for mortgage rates for both 15 and 30 year fixed rates. It is possible we might see that improve a little bit, but as one of my favorite analysts said: "Trees don't grow to the sky, and rallies don't last forever". We are getting to a point that it is scary, and as I mentioned above it might just explode like fireworks. There is not much room for rates to come down any further, and the only ones that can actually time the bottom have a working crystal ball, A time Machine, or some dumb luck.  As far as I am aware, the third option is the only one available to us today, so Lock-Em in, and don't look back. Rates at these levels will be talked about for years to come, and you can say: "I remember when they were giving mortgages away at 4%"

If you have any questions, or need a Mortgage, please do not hesitate to give me a call or to shoot me out an email.

Have a Great week! 

Rob

Robert Rauf

Mortgage Banker

NMLS ID# 248937

www.RobertRaufHomeLoans.com   or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

RRauf@REMN.com

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network Inc.

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Comments (9)

Catherine Chaudemanche - Edison & Central NJ
Metuchen Keller Williams Elite Realty / Middlesex County, NJ - Edison, NJ
Full Time, Informed and Involved- Results Driven

Hi Rob, I hope you had a great extended week-end. Thank you for the info.

Jul 06, 2010 11:57 AM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Rob - I'm having some mixed feelings about the historically low rates right now.  I have a lot of clients right now who are pre-approved and actively out there looking.  When some of my clients heard about rates this past week or so, they have all of a sudden started making offers on properties that they initially passed over the first time they saw them (and for very valid reasons).  Now all of a sudden, they HAVE to get into escrow NOW!

Not sure how I feel about that.  Some of these properties are absolute dumps and are probably never going to appraise or in some cases pass the dpa inspections.  Hmmm...seems some of my clients desperation is getting the best of their common sense.

Jul 06, 2010 12:12 PM
Eleanor Thorne
Equity Resources - Cary, NC
Advantage Lending 919-649-5058

I think it's a guy in Texas who says, "It's better to be outta the market wishin' you were in... than IN the market wishin' you were OUT."  Time to lock!

Jul 06, 2010 12:39 PM
Tammie Jungling, NMLSR ID 455110
Clearwater, FL

Donna,  If you can't get financing on some of those dumps consider Renovtion Financing/203K.  I am sure there is an outlet for you to original those loans or at least refer them to someone who can do renovation financing in your area.

Jul 06, 2010 04:09 PM
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Tammie - Around here, FHA 203k offers are even less popular than an FHA 203b offers.  My FHA buyers (203b & 203k) are competing with the all-cash investor and that is the whale that all LA's around here are looking to catch.  It's not a matter of not being able to do these loans (I do 203k loans), the problem is that most LA's won't accept them.

Jul 06, 2010 07:14 PM
Robert Rauf
CMG Home Loans - Toms River, NJ

Eleanor, are you talking about Larry?

Tammie, the K is a great way, but not popular everywhere...

Donne, I still cant believe you have inventory issues, I am a little jealous!  We have too much and it confuses buyers and slows them down

Jul 07, 2010 02:47 AM
Robert Rauf
CMG Home Loans - Toms River, NJ

Cathy, The long weekend wasnt long enough!

Jul 07, 2010 02:54 AM
Kathleen Lordbock
Keller Williams Realty Professionals - Baxter, MN
Keller Williams Realty Professionals

Lock and load on those low interest rates- if you are buying and if you have found what you want - go for it!

Jul 08, 2010 05:04 AM
Robert Rauf
CMG Home Loans - Toms River, NJ

Kathleen, exactly! dont buy just because rates are low, But if you are considering it, can afford it, are able to and plan to stay for the long run, it certainly is the time to buy NOW!!!  But if you are going to move in a year or two, it doesnt make much sense to buy... Same goes for a Refinance, you need to run the numbers to see what makes sense.

Jul 08, 2010 06:10 AM