York Pennsylvania here!
Lot's on the docket today, so read on! Good news #1- After the carnage of Wednesday, as of right now, we have reclaimed half of that days loss of 207 "basis points" (34 bps yesterday and 94 as of right now today!) This is very encouraging as it may show that the move on Wednesday was indeed a "panic selloff" and we will move back to those levels. I have heard many analyst and pretty smart people commenting that the FED will have to make some announcement as to their intentions for the MBS program and that they may even announce even more money being targeted for MBS's to calm the markets. The last thing this economy needs is to shut off the recovery in housing just when it's taking hold. So for now, I would advise people to "hang out" and see which direction we go, if we get back close to where we were, lock in and be happy.
#2-- FHA has announced that they will allow buyers to immediately use the $8,000 for "costs" in buying a home. NOT DOWNPAYMENT! This just goes to show why we should not get involved in "speculation" about possible new programs. As with the initial comment that sparked all sorts of "we know what is coming" proclamations from many, details have not been announced and NO ONE has this program yet. Once the final details are released and we know how this will work, I'll pass that on.
Important fact--While we are recovering from Wednesday's drop, that is EXACTLY what we have in store WHEN, NOT IF, the government stops holding rates down. Moves like Wednesday's were not supposed to happen while the Gov is doing what they are---but it did! This tell us that the market can move at any time, regardless of "outside" pressure. The problem is that all this action is creating the very real threat of future inflation, or 'hyper-inflation", that is very bad for mortgage rates in the long term. So, as we go forward, while our rates should remain very low, be aware that the day is out there when all this stops. Then, we very likely will move into the mid 6% range and maybe even 7% range within days. So--get on the phone and let all your fence sitters know what happened Wednesday and let them know that is peanuts compared to what may happen when the Gov steps out of the MBS market. The way it looks right now, that should be sometime early next year--BUT- that does not mean the market will not force their hand earlier--WEDNESDAY IS A CLEAR..
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