Danny Salas

Archive for the 'Home Buying' Category

Chico, CA Interest Rates Market Report – Economic Influences – March 10, 2010

We've Broken Through Support

Treasury Auction Does Well

Yesterday’s Auction of 3-Year Treasuries Notes started off precariously.  By the end of the auction, though, it was quite well received and interest rates benefited, but only slightly.  Today, we have a huge $21 Billion in 10-Year Treasury Notes to be auctioned, and longer terms are harder to sell, as inflation factors can whittle down the value of that bond, over a longer 10-Year duration. 

Mutiny On The Policy

The List of Federal Reserve Board “Dissenters” is growing.  Remember Bernanke’s statements, last month, to keep interest rates low “for an extended period of time!”  Dallas Fed President Richard  Fisher, St. Louis Fed President James Bullard, Philadelphia Fed President Charles Plosser and Chicago Fed President Charles Evans have all expressed their concern regarding the “extended period” of time.  Why?  Inflation!  The nemeses of interest rates!  This is alarming and could have an influence on the Carry-Trade.  You do NOT want to get caught up in a change in the carry trade.  It could cost an investment, millions!  The Fed’s in a tough position, right now, regarding when to move rates, so that we don’t experience too much inflation, too quickly.  Or moving them too quickly, and jeopardizing the economy and all the stimulus funds just submitted to Congress and The Senate, for approval.  I hope they don’t hold out too long…

Without Much Support...It's Time To Lock

Locking Advice

We’ve been in a lock mode for some time.  Even though yesterday’s auction fared well, we just don’t have much support to hold lower rates.  We’ve broken below the 100-Day Moving Average, so to climb back above it would take a lot of economic information that’s just not slated for release, this week.

Related Must Reads

The Real Jobs Numbers
Senate Approved Tax Credit Extension

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

Chico, CA Interest Rates Market Report – Economic Influences – March 8, 2010

Careful Floating Into The Morning

Greece IV

It looks like the European Union (EU) will reluctantly bail out Greece.  The uncertainty, in Greece, has helped Mortgage-Backed Securities, as of late, however, the recent developments will definitely change the playing field, and put pressure on interest rates.  With no real economic reports, being released, until Thursday, we’ll have to watch the Stock Market and other technical factors to get a glimpse of where rates will head.

This Week’s Auctions

Tomorrow, $40 Billion in 3-Year Notes will be auctioned.  $21 Billion in 10-Year Notes followed by $13 Billion in 30-Year Notes will finish the week.

Careful Floating Into The Morning

Locking Advice

I like the idea of floating into the day and watching bonds, closely.  We may have to switch to a lock mode.  Earlier this morning, we were down 12 Basis Points, however, currently, we’re down 3.  Not too much movement, but enough to hold steady and see if rates and bond values can remain above the 100-Day Moving Average.

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

Chico, CA Interest Rates Market Report – Economic Influences – March 5, 2010

Nailed It!

Right on the Button!  We watched rates, yesterday, until the afternoon.  Gained 19 basis points…had a re-price for the better two times, for a total of .25% and Locked!  On a $200,000 loan that would save a client $500 in fees, to get into a loan.  Not to mention that it transitioned us into a lower interest rate, by .125%.  So, again, saving clients over $5,400 in monthly payments, through the life of a 30 year fixed rate loan.  That’s why we watch the market, so closely.  I LOVE saving clients money!

Unemployment Rate Holds Steady

The Labor Department reported that the U.S. Economy only lost 36,000 jobs, last month.  They expected well over 50,000 loses, however, the bigger surprise was that the unemployment rate held at 9.7%.  That was surprising, as there are so many claims for Emergency Unemployment Benefits.  So, we’ve dropped over 50 basis points, this morning.  That’s $1,000, on a $200,000 loan.  A lot of money, for a first time home buyer!

Turning To A Lock Mode

Locking Advice

I’d Lock

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

Chico, CA Interest Rates Market Report – Economic Influences – March 4, 2010

We've Already Been Down This Morning...

Jobless Claims

The numbers rolled in at 469,000 new claims.  Wow!  But, that’s what the market was prepared for, go figure!  Continuing Claims were 146,000 lower than last month, but 5.7 Million people are claiming Emergency Unemployment Compensation, so, their numbers aren’t even calculated into the “government numbers,” being reported to monitor how the economy is truly doing…so, it sort of fakes out the market and media, into a false sense of security.  Maybe faking out Senator Bunning, too!

< 60 Days To Get Into Contract

Pending Home Sales were reported at a -7.6% reading for January.  That’s a little disapp0inting, considering we were expecting a 1.0% increase.  The National Association of Realtors contributed this loss to the horribly bad weather. Remember that 49 of the 50 States had snow one day, in January.  You’d think more buyers would be jumping off the fence, to receive the tax credit for home purchasing.  Remember, there’s more than one opportunity!  Think of it…you have less than 60 days to be get qualified for a loan, find an agent you’re comfortable with, look for houses, if you find the one you love…what if it’s a short sale, or a bank owned property that could take more than four weeks to get an answer from, go through the loan process and close by June 30, 2010, in order to receive your tax credit!  Fence sitters…get off your fence!

Good News on Job Front

Well, sort of good news.  Productivity rose by 6.9%, the fourth quarter of 2009.  This, compared to 6.2% the previous quarter.  For the  2009 year, Productivity rose by 3.8%.  Unit Labor Costs were slashed by 5.9%, the fourth quarter and 1.7% for the 2009 year.  So, with productiviy increasing, and labor costs decreasing, it’s generally a sign that businesses will start hiring.  However, be patient, as we’ve written before, businesses are getting a lot more out of the employee than they used to.  So, they’ll squeeze what they can, out of the employee, before adding on more costs and hiring.

Take Advantage Of Where We Are...Today

Locking Advice

So, Unemployment Numbers will be released tomorrow.  It should be depressing!  However, as I have been stating, there’s not much further bond values can rise (and therefore, lower interest rates).  We have the temporary hiring of the census bureau, we already have a market that expects an ugly number, so anything better than expectations can have a temporary effect on rates.  I think that the risks are too great, to not take advantage of today’s rates.  I’d wait for today’s best pricing, then I’d lock!

Related Must Reads

The Real Jobs Numbers
Senate Approved Tax Credit Extension

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook