Posts Tagged ‘Marin Mortgage Rates’
The economy shed 539,000 jobs in April, raising the 6-month total to nearly 4 million jobs lost.
And while the April data may look bad, it’s actually 10% better than what was expected.
As a result, it’s turning into a bad day to be shopping for mortgage rates.
After bottoming out early last week, conforming, 30-year fixed rate mortgages have risen in cost by as much as three-quarters of a percent. Today’s good-for-the-economy report may push costs higher still.
Now, it may seem odd to categorize 539-thousand lost jobs as “good-for-the-economy”, but it’s important to remember that on Wall Street, expectations are everything.
Investors are constantly buying and selling securities based on what they think will happen in the future. And, up until this morning, there was an expectation that 600-thousand jobs had been lost in April.
As it turns out — relative — the actual job loss data wasn’t so bad.
Now, markets are making adjustments and re-forming expectations of what’s ahead for the economy. They’re preparing for things like higher levels of consumer spending in the months ahead, and fewer home foreclosures nationwide. Both outcomes would help to spur the economy from recession.
This helps explain the stock market’s early rally, too.
For now, mortgage markets remain sensitive to whiffs of an economic recovery. In general, if there’s good news for the country, it going to be bad news for mortgage rates.
Mortgage rates are off slightly in advance of the weekend.
Back in February of this year (wow…doesn’t that seem SO long ago), the Economic Stimulus Act of 2008 was enacted and part of that Act was to temporarily increase the loan limit on mortgages backed by Fannie Mae and Freddie Mac to 125% of the average cost of a home, county-by-county, to a maximum of $729,750. Of course, because of our higher housing costs, most of the Bay Area counties qualified for that maximum. However, the Economic Stimulus Act only put that that increase into play temporarily…until December 31, 2008.
We are rapidly approaching that deadline and lenders are going to shut that pipeline down in late November/early December in order to give them time to package the loans and deliver them to Fannie/Freddie before the end of the year. In other words, we probably only have about 6-7 weeks left to offer these higher conforming loan limits to borrowers!!
If you have any real estate financing to complete that would involve a loan for $729,750 or less, it is imperative that you start your process as soon as possible in order to take advantage of this program as time is running short!
We are hearing that there will still be some sort of high limit conforming loan amount in 2009 but it will probably drop to something closer to $625,000. Stay tuned…
Stacey Fleece is a Mortgage Loan Consultant with Countrywide Home Loans in Mill Valley.