Monday, December 01, 2008

What Are Interest Rates Going To Do? 12/01/08

Dear Friends,

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: Monday, December 01, 2008

Presently Market Conditions Are:
The 10 yr Treasury note is below 3% for the first time in its 46 year history. Investors flocked to the safety of government bonds on news from last weeks reports on the nation's labor market, housing market, manufacturing sector and consumer spending. Along with that factor, the Fed announced Tuesday it will buy up to $500 billion in mortgage backed securities. This statement by the Fed "This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally," indicates their goal to stimulate and support the housing market.

My Expectations Are:
The need to restructure Mortgage backed securities could come from refinancing with these lower rates. According to Kim Rupert, fixed income analyst, Action Economics, this plan by the government is a "huge backstop" for the mortgage-backed securities market. The impact of this will take time, so for the immediate watch the economic indicators this week especially Friday’s Non-farm payroll report.

As Your Trusted Advisor For Life, My Guidance For You Is:
Housing starts are down dramatically from last year and inventory will continue to trim down from its current 11 month supply. Along with historically low interest rates, now is an incredible time to buy. Whether you buy or refinance, there is no guarantee rates will go lower, so get with your mortgage professional today to structure the right financing for you.

On Your Financing Team.
Jeffrey Stanton
Your Trusted Mortgage Advisor For Life

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