Monday, May 12, 2008

What Are Interest Rates Going To Do? 5/12/08

You like me, are asked this question every day. "What Do You Think Interest Rates Are Going To Do?" Now here is a customer focused report for Mortgage Market Direction:Week of:

Week of: Monday, May 12, 2008

Presently Market Conditions Are:
The entire economy, including buyers, is in a wait and watch stance to survey the effects of the latest FED rate cut. "Despite a weak housing market, mortgage rates remained almost unchanged this week based on better-than-expected economic data releases that indicated the economy still has some staying power," said Frank Nothaft, Freddie Mac vice president and chief economist. Fannie Mae announced that it will buy the new Jumbo Conforming mortgages for the same prices as those below the old conforming loan limit, which should make some larger mortgages more affordable.

My Expectations Are:
Housing inventories are expected to drop to 400,000 (seven-month supply) by the end of ’08 and to a five month supply sometime in ’09. A five-month supply has historically signaled tightness in the housing market and normally results in a decline in rates. Expected to pass the Senate and be signed by the President, a $300 billion FHA housing loan guarantee program will assist troubled borrowers in refinancing into a mortgage with more affordable terms, resulting in a reduction in the number of foreclosures.

As Your Trusted Advisor For Life, My Guidance For You Is:
Prolonged low interest rates and greater affordability (lowering home prices) will attract buyers into play; indeed it is a good time to buy. Now is the time to contact your mortgage professional so they can structure a mortgage solution to meet your financial goals.

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