Cari Anderson's East Bay Mortgage Update for August 16th 2010
Economic News: The National Association of Home Builders released their Housing Market Index numbers this morning. The index trended down to 13 and has slid down since the expiration of the tax incentives. Another item putting pressure on the Equity Markets was the overnight report of the Gross Domestic Product (GDP) of Japan being less than expected and now it appears China may surpass Japan by year end as the second largest economy in the world.
Mortgage Markets: The yield on the 10 Year Note is continuing its downward trend this morning and is currently trading at 2.586%. The Mortgage Backed Securities market is also doing well and rates are .125-.250 better in fee than Friday's closing levels.
This Week's Reports: Monday: Housing Market Index. Tuesday: Housing Starts, Producer Price Index (PPI) & Industrial Production. Thursday: Jobless Claims.
Stay tuned for the Next East Bay Mortgage Update...
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Economic News: The announcement yesterday from the Federal Open Market Committee (FOMC) retained the statement that "rates are expected to remain low for an extended period". In addition, it was noted that "the pace of recovery in output and employment has slowed in recent months" but also included that growth was continuing. International Trade numbers were released this morning revealing a sharp rise in our trade deficit, reaching $49.9 Billion for the month of June, as the demand for our exports fell overseas while our appetite for imported goods rose. The Equity Markets have sold off today as a result of fear that growth in both foreign and domestic economies may be slowing. This has led to a "flight to safety" which has benefited interest rates.
Mortgage Markets: The yield on the 10 Year Note has fallen to a yield of 2.710% and the Mortgage Backed Securities market is doing well as demand is strong. Today's mortgage rates are a bit better than yesterday's closing levels. 
Economic News: Monday's Existing Home Sales numbers came in at the top end of estimates reflecting the influence of the tax credits. Total housing supply jumped 11.5% to 8.4 months which was a little disappointing and may put pressure on any upward price movement in the next few months. Case-Shiller's Home Price Index numbers were announced this morning and were basically flat for March. Look for a jump in the April numbers since buyers were out in force to secure a contract before the tax credit deadline. Finally, Consumer Confidence was well above expectations showing signs of life within the consumer segment. 
Mortgage Markets: The 10 Year Note has made strong gains and dropped to its lowest level since April 2009. This is due to the ongoing concerns within the EU countries, global growth and debt fears, new financial market regulations and an uptick in worries about the North/South Korea situation. This morning's 10 Year Note is yielding 3.14%. In addition, the Mortgage Backed Securities are doing well but not as good as Treasuries. If you are looking to close on a purchase or refinance in the next 21 days now is the time to look at locking in a super rate.
