Rates aren't really dropping to record lows, but we've seen a few days of the treasury yields go in our favor.
With all the turmoil in what the economy is going to do, especially with every financial article that I've read saying that even though the 4th quarter was better than expected, they still see signs of a declining economy starting off the new year and the gains will not be sustained.
Every bone in my body tells me that in order to keep the Real Estate market somewhat alive, the Fed will have to continue it's purchasing of MBS and keep rates low. Bernake basically said that the Fed rates would stay low for the next year or so, but no one is addressing the fact that when the Fed gets out of buying MBS we should see a natural rate hike, even if it's just by a half a point.
That might not sound big but believe me, the already slowing RE market will continue to slow and the refinance will drop off dramatically. We need your help. YES YOU!! Write or email your congress person, senate person and even the white house (all info easily found by Googling each branch) to extend the Fed's purchasing of Mortgage Backed Securities and temporary Fannie and Freddie guidelines. This will help you and be good for the economy.
As for anyone looking to refinance or even purchase, get off the fence and do it now. Stop waiting and get those applications in. With the new guidelines and low rates everyone is getting backed up. We've got the time now but if you wait another month or two to start, you quite possibly could miss the boat.
As always, feel free to write willie@1bearfinancial.com or call 818 264-0999 to get your loan started. We're extremely busy but we'll take care of you. Thanks.
Friday, February 26, 2010
Wednesday, February 24, 2010
Interesting week
In the past week or more there seems to have been a bit of over zealous speculation that we were going to have strong financial numbers come out. Mainly due to what the experts thought of as a good holiday season. Let's not mistake what "good" means. It was good to them in the sense that people still bought presents and the world didn't collapse. That's how fragile our economy is right now.
I don't get any sense of a stable economy when talking to people on "main" street. But as I have been saying, there seems to be a greater divide between what Wall street thinks and what is really happening to the average person. We're playing on two separate playing fields. It's easier and easier for Wall street to make it's money back than it is to put people back to work and figure out a health care system that will help the average American rather than use us a living ATM. I like that analogy. The health care system now, takes and takes from us like an ATM and never maintains it. The ATM could be in Beverly Hills or Compton, it still pays and the owner never has to take care of it, just keeps making money off of it. Every now and then the ATM will need some maintenance and instead of using the profits that they've been making doing nothing, the owner has the repairs made and then raises the transaction fee. There, I thought I was going to be talking about the economy but I somehow figured out our health care system and why it's broke.
Thank you, goodnight. I'm here all week, don't forget to tip your waitresses.
We'll I'll quickly get back on track. After anticipation of a healthier economy and fears that it would bring on inflation faster than expected, you saw rates move up. But when real economic numbers like housing purchases and refinance applications come out lower than ever, you see that we are still teetering on the edge of a very sharp knife. Don't push rates up too fast because you don't want to bring down one of the major pillars of economic recovery. Not just mortgage rates but businesses that utilize credit which right now are relying so much on low rates to be able to make a profit in this bad market. I think you need to see people back at work and the average man being able to spend more money before you start raising rates and worrying about inflation.
I'm anxious to see what the president's speech will do to the markets. If more and more news comes out negatively, it might help the president make a case for universal health care.
I don't get any sense of a stable economy when talking to people on "main" street. But as I have been saying, there seems to be a greater divide between what Wall street thinks and what is really happening to the average person. We're playing on two separate playing fields. It's easier and easier for Wall street to make it's money back than it is to put people back to work and figure out a health care system that will help the average American rather than use us a living ATM. I like that analogy. The health care system now, takes and takes from us like an ATM and never maintains it. The ATM could be in Beverly Hills or Compton, it still pays and the owner never has to take care of it, just keeps making money off of it. Every now and then the ATM will need some maintenance and instead of using the profits that they've been making doing nothing, the owner has the repairs made and then raises the transaction fee. There, I thought I was going to be talking about the economy but I somehow figured out our health care system and why it's broke.
Thank you, goodnight. I'm here all week, don't forget to tip your waitresses.
We'll I'll quickly get back on track. After anticipation of a healthier economy and fears that it would bring on inflation faster than expected, you saw rates move up. But when real economic numbers like housing purchases and refinance applications come out lower than ever, you see that we are still teetering on the edge of a very sharp knife. Don't push rates up too fast because you don't want to bring down one of the major pillars of economic recovery. Not just mortgage rates but businesses that utilize credit which right now are relying so much on low rates to be able to make a profit in this bad market. I think you need to see people back at work and the average man being able to spend more money before you start raising rates and worrying about inflation.
I'm anxious to see what the president's speech will do to the markets. If more and more news comes out negatively, it might help the president make a case for universal health care.
Friday, February 12, 2010
No rate drop - follow up
The treasury auction didn't do as well as most anticipated. Who knows why, it could be because half of the east coast is under 3 feet of snow and no one went to work?
Bottom line is that we're just about where we were a week ago. I still hold out for a swing down. But as I've been telling clients lately, let's take a step back and look at the big picture. "So you don't get 4.875%?" Is there something wrong with 5% or 5.25%? I don't think so. Let's remember pigs eat and hogs go to the slaughter (or something like that, but you know what I'm getting at).
I don't believe this next item to be what will happen but the Fed is supposedly slowing down on its buying of MBS (mortgage backed securities). This will probably cause rates to rise by a percentage. Like all things lately, if the Fed does this and rates go up, I think we're going to be in for a big disaster. One of the few REAL green "shoots" that are propping up our economy is the fact that rates are low which encourages purchases and refinances. Just like the housing credits, which they actually expanded who can qualify, I feel they'll see the light and continue the buying of MBS through the end of the year. But you never know.
My suggestion is let's capitalize on these great rates and not try to gamble and get the very bottom. Let's get loans in and closed out. Because you don't want to be someone who missed the boat because you HAD to have a rate in the 4's instead of 5%, which probably is only a $25 - 50 per month difference.
Bottom line is that we're just about where we were a week ago. I still hold out for a swing down. But as I've been telling clients lately, let's take a step back and look at the big picture. "So you don't get 4.875%?" Is there something wrong with 5% or 5.25%? I don't think so. Let's remember pigs eat and hogs go to the slaughter (or something like that, but you know what I'm getting at).
I don't believe this next item to be what will happen but the Fed is supposedly slowing down on its buying of MBS (mortgage backed securities). This will probably cause rates to rise by a percentage. Like all things lately, if the Fed does this and rates go up, I think we're going to be in for a big disaster. One of the few REAL green "shoots" that are propping up our economy is the fact that rates are low which encourages purchases and refinances. Just like the housing credits, which they actually expanded who can qualify, I feel they'll see the light and continue the buying of MBS through the end of the year. But you never know.
My suggestion is let's capitalize on these great rates and not try to gamble and get the very bottom. Let's get loans in and closed out. Because you don't want to be someone who missed the boat because you HAD to have a rate in the 4's instead of 5%, which probably is only a $25 - 50 per month difference.
Wednesday, February 10, 2010
Treasury Auction - rate drop?
There is supposed to be a treasury auction today, which could drive rates down. With poor or flat lined numbers that have been coming out, people could make a short term move into treasuries. This demand could push the yields down and cause rates to follow.
I'd be on the lookout for a small swing down. Anyone that's on the fence or has a loan in process that's not locked, should look to maybe lock. As I always say, no one can predict what the market will actually do and what the banks do based off this market (the current prices might already reflect what the banks think is going to happen). BUT, I'd bet on rates going in the red which is always nice even just a little bit.
As someone who will tell you, you're not going to hit rates at the bottom, this is one of those swings I'd jump on and let the chips fall where they may. If rates drop we'll have a week or so to capitalize so let's not waste it.
Call me 818 264-0999 to discuss any scenarios you may have.
Willie
I'd be on the lookout for a small swing down. Anyone that's on the fence or has a loan in process that's not locked, should look to maybe lock. As I always say, no one can predict what the market will actually do and what the banks do based off this market (the current prices might already reflect what the banks think is going to happen). BUT, I'd bet on rates going in the red which is always nice even just a little bit.
As someone who will tell you, you're not going to hit rates at the bottom, this is one of those swings I'd jump on and let the chips fall where they may. If rates drop we'll have a week or so to capitalize so let's not waste it.
Call me 818 264-0999 to discuss any scenarios you may have.
Willie
Thursday, February 4, 2010
Jobs, Jobs, Jobs
Reading the jobs report these days is like trying to figure out the dead sea scrolls. What does it all mean?
10% unemployment, that we can all agree is not good.
Seasonally adjusted for January, I believe is 2.5 million jobs lost that their not counting, is what I think I read today. But if you've read or talked to me you know how I feel about "seasonally adjusted". Tell the person who lost there job, that they where seasonally adjusted, Especially in a season where they may have not worked for the prior year and just picked something up to make it through the end of the year. That term is so vague and can me so many different things in the real world depending on what the situation of the economy is like.
Gas seems to be taking a hit, that is helping rates right now. But we all know now that gas prices are the worst cartel schemes on the planet. I don't have time to get into that now.
Bottom line is we need jobs and jobs that are sustaining. I really don't see that when I'm talking to the average person. Now maybe we'll be seeing a flattening of the unemployment numbers or slowing down. My question is, when and how are we going to get that number lower? Slowing losses is one thing. It's eventually going to happen. There has to be a water mark that we meet that will naturally balance out but growth, that's the question and no one seems to know the answer to that.
I'll keep searching. Good luck to all that are looking for jobs and / or are not fully employed (which is the secret number to be afraid of).
10% unemployment, that we can all agree is not good.
Seasonally adjusted for January, I believe is 2.5 million jobs lost that their not counting, is what I think I read today. But if you've read or talked to me you know how I feel about "seasonally adjusted". Tell the person who lost there job, that they where seasonally adjusted, Especially in a season where they may have not worked for the prior year and just picked something up to make it through the end of the year. That term is so vague and can me so many different things in the real world depending on what the situation of the economy is like.
Gas seems to be taking a hit, that is helping rates right now. But we all know now that gas prices are the worst cartel schemes on the planet. I don't have time to get into that now.
Bottom line is we need jobs and jobs that are sustaining. I really don't see that when I'm talking to the average person. Now maybe we'll be seeing a flattening of the unemployment numbers or slowing down. My question is, when and how are we going to get that number lower? Slowing losses is one thing. It's eventually going to happen. There has to be a water mark that we meet that will naturally balance out but growth, that's the question and no one seems to know the answer to that.
I'll keep searching. Good luck to all that are looking for jobs and / or are not fully employed (which is the secret number to be afraid of).
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