Weekly Article
Hi Friends,
Interest Rates
Our conforming 30 year fixed rate improved 0.125% this week to 5.125%, as did our 30 year fixed rate FHA rate which declined a similar amount to 5.25%. Check out the attached Rate Flier for rates on our other benchmark loan programs.
Outlook: I’m a little concerned that we are currently in an interesting juxtaposition of the stock and bond markets. Typically when the stock market is moving up fairly strongly as ours has been in the past two weeks, yields on long term bonds move up also. However, in this market yields on long term bonds have actually moved down slightly as the stock market has gained so much value in the past couple of weeks. I haven’t seen, heard or read anything about the government buying more large issues of Mortgage Backed Securities, although it should still have a lot more capacity to do so any time it might choose to. I tend to think this current moderating effect is simply a continuation of the pleasant surprise of recent weeks that saw more foreign buyers of U.S. Treasuries than was previously expected by most market analysts and investors. Despite our own concerns as U.S. citizens about out growing budget deficit and trade imbalance, we must be somewhat myopic in that regard, because apparently our Treasury issues continue to be held in pretty high regard around the world in comparison to alternative investments in other countries and economies given the still very low interest rate that we have to pay to attract investors to buy them despite all of our domestic economic and budgetary woes and concern about inflation. That bodes well for mortgage rates in general.
On the international scene, I am concerned that right when our fragile economy seems to finally be showing some real signs of life, we may be entering a critical period of increasing tensions between Iran and Israel, which of course would most certainly involve the United States. Should a dramatic escalation of tensions occur suddenly in this region, who knows what effect it could have on our domestic economy? Oil prices could spike; interest rates could soar; stocks could crash; commodities could go through the roof. All bets would be off. I wouldn’t have a clue where we might end up if the stuff really hit the fan – like if Israel – against the wishes of the U.S. - were to preemptively strike targets in Iran to try to deny Iran the opportunity to complete nuclear weapons. Stay tuned. This topic should be getting plenty of press coverage in coming weeks. President Obama may have his first real test of international diplomacy in keeping Israel at bay on the military front and at the same time bringing Iran into some kind of acceptable compliance on the nuclear weapons issue that is getting closer to a critical stage of development.
Humor Is the Best Medicine
Golf balls
A man enters a bus with both of his front pockets full of golf balls and sits next to a beautiful blonde.
The puzzled blonde keeps looking at his bulging pockets.
Finally, after many glances from her, he says, "It’s golf balls."
Nevertheless, the blonde continues to look, thinking about what he has said.
Not able to contain her curiosity, she asks, "Does it hurt as much as tennis elbow?"
Thoughts du Jour
Some things have to be believed to be seen.
Trouble is only opportunity in work clothes.
As always, call me anytime!!
Ciao,
Recommended