A rundown on what mortgage experts are saying about the market this morning:
"As most know, the Feds came in last week and rescued mortgage giants, Fannie and Freddie. Prior to this takeover, there was a cushion within the rates because investors did not have much confidence in mortgage backed securities. When the Feds came in and rescued these two companies, confidence improved, thus reducing the cushion and rates significantly last Monday. In fact rates improved by .5%.
On top of this, most economic indicators recently released are not good. Concerns about the banking industry and unemployment numbers just aren't good. With this news, most expect the Fed to cut rates to be cut by the Feds by .25-.5% tomorrow when the Feds meet.
Every indicator shows rates will remain low and may even go lower through the remainder of the year. What more could you ask for? Supply is enormous, prices are low, and rates are really low.
So why aren't people buying? The media sells doom and gloom. If the media were covering some of the positive things, it would stimulate buyers. Most of this bad news is a backlash from bad lending from 2003-2007. However, there are a number of solid financial institutions out there today, including Fannie and Freddie, that can weather the storm." From What about interest rates Bob Lowery
First Financial Opinion: I have to agree, sadly, that all this negative news on the employment front and Lehman and Fannie news means that the Fed will have to cut again and that rates will stay low. One point I make often is that rates go down in anticipation of a Fed cut, but then as soon as the Fed cuts they typically jump a bit the same day. If you are looking to lock your rate, you may as well do so today.
"For those of you with your head in the sand last weekend, or recovering from a Hurricane Party………..the Gov’t has announced it will be taking over Fannie Mae and Freddie Mac which allows the US Treasury to back the bonds offered by these companies. This added strength to the bonds and the price of the Mortgage Backed Securities jumped higher based on this news. Barring this past February, this puts these bonds at near the highest level they have seen in over 2 years!!
Rates have improved and are continue to add to their gains. Currently the bond pricing is up over 150 bps since its close on Friday (9/6/08). This is good news for Mortgage Rates as we anticipate improved pricing in the future!!" From Good News for Current Market Freddy Bristow
If you are in NW Indiana (Valparaiso, Portage, Hebron, Hobart, Crown Point, Chesterton) and you are ready to refinance, this is the best time in three years ... thinking you may want to buy your first house? Do it. Call me or email today to set an appointement for a free home mortgage analysis.