Weekly Market Update - Rates are going up and 2010 Realtor Success Summit

Weekly Market Update from Waterstone Mortgage

There are only 41 days (unless it’s extended) until the first time buyer tax credit expires on November 30^th so get those buyers off the fence. 

 

ACT NOW, MORTGAGE RATES ARE GOING UP

The last 12 months have seen the lowest interest rates over an extended period in history.  Mortgage rates have been as low as 4.625% and as high as 5.625%, with an average around 5.125% for the last year.  Multiple factors led to this, almost a perfect storm of economic factors and government intervention.

-the Federal Reserve program to purchase 1.25 trillion dollars worth of Mortgage Backed Securities between January 1, 2009 and March 31, 2010

-the stock market decline immediately following the financial market meltdown in late 200

-unemployment nearing 10%

-very low inflation

-the worst economic recession since the Great Depression

Low inflation, a poorly performing stock market, and competition to purchase Mortgage Bonds are all factors that individually will cause lower mortgage rates, and when all 3 are combined you will see what we have seen for the last year.  Unfortunately, the party is coming to a close.  The same factors that caused mortgage rates to fall to record lows are about to turn them in the other direction:

-the stock market has crossed the 10,000 mark and most of the Fortune 500 companies have beat earnings expectations for the 3^rd Quarter

-the Federal Reserve is pulling back its Mortgage Backed Security purchase program, buying ½ as many bonds in a given week as it had earlier this year, with the program set to run its course at the end of March 2010

-continued govt. spending will weaken the US dollar, and cause inflation to rise; in the last week the govt. announced a budget deficit of 1.4 trillion dollars for the just completed fiscal year, which blew away the previous record; continued deficits mean more govt. spending (=borrowing) and will continue to weaken the dollar and cause inflation to rise

The bottom line is, mortgage rates are going up, so don’t wait to purchase or refinance as doing so might mean the difference between 5.00% and 6.00% on your next mortgage.

 

Pyramid of the Complete Realtor Presentation

I have been asked to give my presentation, The Pyramid of the Complete Realtor®, at ORRA for the ABC’s of Real Estate next month.  The presentation will be Wednesday November 4^th from 2:00 – 3:30.  I hope to see you there.

 

Underwriting

Our current underwriting turn time for Conventional, FHA, and VA loans is 2 days!  That’s right, two days after sending a file to underwriting, I have an approval.  If you are having issues closing on time call me.

 

Market Update

Interest rates have ticked up slightly this week.  Conventional rates are in the 5.25% range while FHA is around 5.00%.  5/1 ARM rates have dropped considerably in recent weeks, into the upper 3’s, and can be a good alternative for someone looking to own a home for 4-6 years.

 

2010 Realtor® Success Summit

Last week we sent out the first invitations for the 2010 Realtor Success Summit, to be held December 1^st from 9:00 – 1:00 at the Winter Park Civic Center.  In the first week we received 38 RSVP’s, and we only have room for 150.  We will have multiple speakers, topics, expert panels, and FREE FOOD!  Reserve your seat today for what will be a great educational and motivational experience.

To RSVP, e-mail mpischke@waterstonemortgage.com

Have a great week!