HomeLoans Blog

Rates came out this morning with a big drop, a head turning drop. They quickly moved back up. But just a little.

So we head into the weekend with an established trend of rates moving lower. It looks like that trend will lead us into next week.

Good news for buyers and sellers.

And more good news, Congress has finally passed the Rural Development Funding extension. Took a good bit of time, but it has finally passed

I slept on this last night. The stock market and the bond market really have no direction. We have to pick to lock or not to lock, in a directionless market.

OK, here goes.

I think corporate earnings are enticing investors into the stock market, so as corporate earnings are generally good investors will move into stocks.

This movement will push bond prices down, and interest rates will begin to tend upwards.

This is my prediction over the next two weeks. It is likely that continuing economic problems - government stumbling, bad consumer spending, bad unemployment, poor manufacturing, European woes, etc will turn investors back to the safety of bonds.

And that is what we are looking for - how the investors are responding.

Good luck with you decision. My thoughts are still to lock.

The decision to take a 4.25% 30 year rate will seldom ever be the wrong decision. :)

The Federal Reserve Beige Report came out today with less that encouraging commentary. The report looks at uneven regional economies and loss of manufacturing. This combines with the recent drop in Consumer Confidence to keep rates low, despite very upbeat corporate earnings.

For a good summary of the Beige Report.

There is too much uncertainty in the market, with no real direction. I am keeping my recommendation to lock your low interest rate now. Bonds showed a slight improvement today, but there seems to be only a little upside in floating vs a large risk of higher rates.

Additional uncertainty is coming soon as the debate on reforming Fannie and Freddie and the home finance industry begins in the public eye.

Will they ever let housing recover?

I read this article tonight that seemed to point to the issue. There have been good corporate earnings reports - improving profits.

But families are still struggling, and not feeling good about things.

Here's the reason:

Corporate profits are coming from cuts, leaving people still unemployed.

Here's the article.

Of course this is not sustainable. It may mean improved productivity and result in a more efficient economy, but at some point we need to employ our workers.

We have had several days in a row with mostly sideways movement in the mortgage bond market. The big news for today was mixed. The housing index was better than expected and the consumer confidence report was worse - neither were different by much.

There was a Treasury auction today. A great indicator whether investors are excited about safe bond investments. Not real good interest.

Sooooooooo ......

I think it is shaky with interest rates - My recommendation. Lock and be happy.

Video below touches on the DIY solar panels presentation and looks to the weekend with Riverside Nights music festival.

Today mortgage rates have held steady - with the bond market not making any significant movement in either directions. I tend to think this is the beginning of a few days of increasing rates. Tomorrow's Consumer Confidence report will impact. Otherwise we wait for the Federal Reserve Beige Book on Wednesday.

Tonight if you are interested I recommend the DIY Solar Panel presetion form 7-9 pm at the Sierra Club meeting at Green Spaces. Call if you need directions - 423-280-0345.

This article from Inman News is telling. With rates so low, buyers and homeowners are keyed into rates and lenders might be tempted to quote lower than they can lock.

Maybe switch to a bit higher margin on the actual lock day.

The article tells a story of a buyer who walked from a locked loan because another lender quoted a lower rate.

The lender with the lower interest rate would not lock the rate, instead waiting for complete borrower information and amazingly an appraisal.

Now there is no reason to hold the lock for an appraisal. That should be a warning sign.

The article suggests that the criteria in determining is the lender's lock requirements are legitimate is "whether the lender offers an objective method of disclosing its loan prices."

When comparing rate quotes, make sure the quotes are from the same time (not just day, the same time) and that lenders can lock that rate today.

Then as the new borrower, respect your commitment to the chosen lender and close your loan with them.

The Fed Chairman gave the first day of his semi annual testimony to Congress today. The comments helped stop a short stock market recovery and sent rates even lower.

Good for mortgage rates.

Not so good for the economy.

He seemed to suggest that there are no imminent plans for futher stimulus, and that concerns are shifting to prevent inflation, which is likely at some point given the large stimulus. 

I do not know the answer, but it appears that I am not alone in not knowing the answer.

One idea - help small business or at least stop with the unrelenting regulatory changes and let us catch our breath as we seek some certainty about what Congress will do next.

Here is a picture idea of what the movement in rates looked like today.

(As the line goes up rates are moving down.)

It will be a fun day today watching rates. Investors will dissect every nuance in the Federal Reserve Chairman's testimony. Fun. Fun.

He begins at 10.

And we wait. :)

I spent today being amazed at the remarkable lineup that spoke today at the Get Motivated Seminar. I will post more on this event and speak a little in my video tomorrow.

Today at least, let me say I was very glad to go. I saw many people that I knew, and a few that I just met today.

Chattanooga Mortgage Rates

Rates have moved up a bit the last two days. No real reason except some decent recovery in the stock market. The stock declines last week were probably excessive and deserved the upward corrections of the last couple days.

However, housing starts remained fairly good and building permits actually went up. These were better than I had expected.

Tomorrow is the big day with Fed comments beginning at 10AM. These comments will set the direction for the remainder of the week at least.