Rate Watch update

Posted | 0 comments

Happy Friday April 2, 2010

Big news this morning.  The U.S. economy adds 162,000 jobs in March, single biggest increase in 3 years.  While this is certainly great and much needed news for our economy, mortgage bonds are selling off once again this morning.  The combination of alternative investments looking more attractive than bonds, and the threat of inflation in an expanding economy is what is triggering the sell off.

After 15 months of purchasing bonds to help prop up the bond market, as of Wed of this week the Fed is out of the market.  Without the Fed in there to mop up the sell off, there is not much to stop the selling, and rates are inching up already this morning as a result.   In the past week, we’ve seen about .25% worsening in mortgage rates.

Good news for California first-time homebuyers (and buyers of new construction); a new $10,000 Tax Credit bill was signed by the Governor this week.  So for the lucky buyer who gets into contract before April 30, they could possibly benefit from the $8,000 Federal credit, and the $10,000 CA credit.

Have an awesome Easter weekend!   Let me know if I can help you or someone you know with any real estate financing need.

Mike