Daily Mortgage Comment

Monday’s bond market has opened in negative territory as Friday’s selling carries into the new week. The stock markets are showing gains with the Dow up 95 points and the Nasdaq up 15 points. The bond market is currently down 12/32, which will likely push this morning’s mortgage rates higher by approximately .250 – .375 of a discount point over Friday’s morning rates.

There is no relevant economic news scheduled for release today or tomorrow, but the rest of the week is fairly busy. There are five monthly reports scheduled for release between Wednesday and Friday along with tomorrow’s FOMC meeting.

Weekly Mortgage Talk

Mortgage bonds prices fell last week applying significant upward pressure to mortgage interest rates. Trading was volatile throughout the week, as market participants remained concerned over the recent credit issues and inflation. Lower than expected unemployment and higher than expected average hourly earnings resulted in bonds falling considerably last Friday. Adding to the volatility were triple digit movements in stock prices throughout the week.For the week, interest rates on government and conventional loans rose by about 3/4 of a discount point.

The Fed meeting Tuesday will be the most important event this week. Trade data, retail sales, producer price index, consumer price index, industrial production, and capacity use data will also be important.

Fannie & Freddie Conforming Loan Limits Stay The Same

Courtesy of David Messineo, Loan Officer
Apex Home Loans
301-365-3100

Fannie Mae and Freddie Mac have recently announced that conforming (non JUMBO) loan limits for a single family home in 2008 will remain at the current level of $417,000. This is the second consecutive year that loan limit has stayed the same, having been originally set at the current limit back in 2006. In the meantime, long term mortgage interest rates have remained stubbornly low. In fact, just last week, the 25 month low for 30 yr fixed rate mortgages was reached.Combine this with lower home prices and an increase in inventory in many neighborhoods, and today’s real estate market presents a variety of great long-term opportunities. Entire neighborhoods that you may not have been able to afford in 2005 could now be open to you! I have included a portion of Fannie Mae’s press release below, in case you would like to review it. Feel free to call me at your convenience to discuss potential opportunities for you or someone you know in need of mortgage financing.

Mortgage Comment

Market Comment

Mortgage bonds rose pushing rates slightly lower last week. Rates were helped by continued equity weakness and tame core inflation data. Inflation continues to remain a concern amid high energy prices. The core rate of the consumer price index, which excludes volatile food and energy prices, rose 0.2%, exactly as expected.

For the week, interest rates on government and conventional loans fell by about 1/8 of a discount point.

The Fed minutes Tuesday will be the most important event this week. Housing starts, leading economic indicators, and consumer sentiment data will also be important. The market may be volatile Wednesday as trading in bonds stops early ahead of the Thanksgiving Holiday Thursday. Trading Friday will also be shortened.