Dennis' Mortgage Blog

Home sales in Los Angeles and Orange County are up 20% from last May.  Yes prices are down about the same percentage, here is how I interpret that data:  the entry level, first time buyer market is active and selling.  If the activity continues the local housing industry will begin to stabilize from the bottom up.  Anyone thinking about entering the market and becoming a home owner in the next six to twelve months should think about moving that time frame up to take advantage of the current combination of low rates and prices.  Have anyone you know thinking about buying anytime in the near future call me now to see what their current purchasing ability is and/or what steps they need to take to become a home owner.

Lots of economic news this week has caused stock prices to drop significantly and the beneficiary of this has been the bond markets—and mortgages.  The domestic economic data has had a smaller effect than it usually would, with the annual inflation rate sitting right on the Feds target number of 2%, and personal income and spending up (thanks mainly to the government stimulus tax rebates); usually these reports would impact interest rates.  The past two days the most recent jump in petroleum prices and the downgrading of whole sectors on Wall Street caused huge sell offs in equities and the money being reinvested in bonds.

Prior to closing the mortgage backed securities markets broke through the 25 Day Moving Average, on the positive side.  Those of you following the rates the past several weeks know they have been slowly climbing; technically the close today above the 25 day line may signify momentum to lower rates—it very much depends on early next week and how the stock markets perform as to whether investors will continue to pull out of equities and invest in bonds.  As always predictions are guessing and when it comes to someone’s house payment, I say…

Lock your rate and terms as soon as you enter escrow!  That has been my advice for the past twenty years and I see little reason to change it in this market.

The positive momentum the past two days has resulted in no change in rates from last Friday, a welcomed result after our recent climb to the highest rates since last August.

NOTE PRICING BELOW IS BASED ON 20% DOWN FOR JUMBO LOANS AND 10% DOWN FOR CONFORMING, 3% FOR FHA, FULL DOC, AND FICOS OF 720 AND ABOVE (change from last Friday):

30 year conventional at 1 point 6.25%                        Flat

30 year conforming-jumbo at 1 point 6.375% Flat

30 year FHA at 1 point 6.375%                       Flat

30 year jumbo at 1 point 7.625%                    Flat

This weekend AJ and JD move into their new home.  This couple has been extremely committed and dedicated to being home owners, as dedicated and committed as any couple I have worked with in twenty years.  As we get closer to Independence Day I can think of no better example of the American Dream than this couple. Thank you AJ and JD for the opportunity to work with you and congratulations on you new home!  

Please feel free to forward this email to your co-workers and clients--or send them to my Mortgage Blog where it is posted weekly.

I am available throughout the weekend to assist with scenarios, pre-qualifications and pre-approvals and other questions.

Have a great week,

Dennis

Dennis C. Smith
Stratis Financial
Direct (562) 472-1118

Mobile (562) 243-6912

Fax (562) 684-4316
 

www.DennisCSmith.com : apply on-line, check rates, check loan status and much more