Danny Salas

Chico, CA Interest Rates Market Report – Economic Influences – April 23, 2010

Greece Is Being Rescued...AGAIN

Greece IX

Things are looking better for Greece, and therefore the safe-haven for US Treasuries and Mortgage-Backed Securities has been abandoned, causing rates to increase.  Here is where we must be patient.  Most of our pipeline is locked, however, with some of the new applications taken, we’re risking not locking in order to see if Stocks have, indeed, moved to an level below their April 16th low of 10,973.  If they ignore this level, and are able to remain above the high’s of 11,154, than I will have been wrong, and interest rates will struggle with moving below their current levels.

Greece IX 1/2

Greek Prime Minister George Papandreou has asked the European Union (EU) and International Monetary Fund (IMF) for their $45 Billion Bailout funds.  Yesterday, I reported on Greece’s financial status, according to Eurostat.  This $45 Billion is a bandaid for their incredible deficit and watch this closely, as Greece will have to plan and cut to get out of their financial struggles.  Sound familiar?

First Time Tax Credit Boosts Home Sales

Home Sales were up 27% from the last month’s record lows.  The First Time Home Buyer’s Tax Credit had a lot to do with it, however, good weather played into the numbers, as well.  Remember, that if you’ve owned a home, five of the last eight years, you would also qualify for $6,250 for just buying a new primary residence.  So, this benefit, also helped increase sales.  411,000 new homes sold, compared to last months 324,000.  The rate in which homes sell, also accelerated to a 6.7 month holding period, as opposed to the 9.2 month reading that we saw in February.  It will be interesting to see how these numbers fare when the stimulus packages expire.

Durable Goods Orders

Durable Good Orders fell by 1.3%, however, when stripping out volatile transportation statistics, it actually gained a promising 2.8%, dominating the expected 0.7% increase, set by the market.

With Lock Barrel's Cocked...We're Still Floating

Locking Advice

At this point, I think we better continue to float, and watch what the Stock Market will do.  We lost some value, and Greece has been rescued, just in time to possibly have a negative effect on the Treasury Auctions this coming week, however, the Stock Market will play a larger roll, in where rates go.  Our loans are registered for locking…with an itchy finger on the lock button, and I warned of this volatility…expect more.

Related Must Reads

Greece’s Problems: What Eurostat Reported
Tax Credit Extension: Do YOU Qualify?

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