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The Week In Review (April 30, 2007) : What To Watch For

April 30, 2007

Last week, a ranking Fed official delivered a “wait-and-see” speech on inflation and that roiled the mortgage markets plenty. After sitting in a tight range for Monday through Wednesday, rates exploded higher Thursday as markets abruptly changed their expectations of growth for the rest of 2007. Despite weak housing numbers, employment and consumer spending figures […]

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What’s All That Yellen About?

April 27, 2007

So much for market calm. The mortgage market tanked yesterday when, in response to conflicting data about growth and inflation, San Francisco Fed President Janet Yellen said “watchful waiting” is the Fed’s likely next step. This surprised markets because most expect the Fed to lower the Fed Funds Rate within the next few months. The […]

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With The Next Fed Meeting 13 Days Away, Markets Will Listen For Clues

April 26, 2007

Mortgage rates have been fairly lazy this week, reaching a near flatline.  Even the much-talked about housing data didn’t do much to unperch markets from their current levels. This afternoon, Fed officials Yellen, Fisher, and Mishkin each speak to the public in separate appearances.  If data can’t move mortgage rates, perhaps opinion can. Of the group, […]

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Builders May Be Figuring Out The Market Faster Than Home Sellers

April 25, 2007

According to all of the headlines, existing home sales are down across the country.  Way down.  Check out this sampling: Sales of Existing Homes Plunge Steeply (NY Times) Existing Home Sales Plunge In March (Houston Chronicle) Existing Home Sales Plunge, Biggest Retreat In 18 Years (Salt Lake Tribune) However, it’s important to keep these statistics […]

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Do Your Own Research And Your Appraisal Process Can Be Worry-Free

April 24, 2007

The appraisal of a home can be a bit frightening.  After buyer and seller have agreed on a price and signed a contract, a mortgage lender will send an independent professional to verify that the price is “reasonable” and fair. The appraisal process begins with a licensed appraiser making a thorough inspection of the home, […]

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The Week In Review (April 23, 2007) : What To Watch For

April 23, 2007

The economy showed signs of pushing forward last week, but major pressure on the average American consumer surfaced in the form of rising gas prices. Overall, it was a mixed bag for mortgage markets. The Consumer Price Index (CPI) jumped 0.6% last month.  This cost of living increase was much larger than expected and mostly […]

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How 2007 Gas Prices Are Pacing With 2006 Gas Prices

April 20, 2007

Gas prices are entering a very similar pattern to 2006 across the United States and — while it’s bad news for motorists — it could be bad news for mortgage rate shoppers, too. Last summer, gas prices averaged more than $3.00 per gallon for three main reasons: Fear of supply reduction from the Middle East Fear […]

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Why Downpayments Are Investments, Not Cushions

April 19, 2007

When home prices are stable or falling, home buyers often mischaracterized their downpayment on a home, calling it their “cushion” against falling home prices. Nothing could be farther from the truth. Nobody wants to owe money when they sell their home.  In fact, when asked, most people will answer that they just want to “break […]

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Whichever Way The Winds Blows

April 18, 2007

Up and down.  Up and down.  Up and down. It’s been a veritable roller coaster over the past two weeks for mortgage rates, mostly because traders can’t find the answer to the most important question facing mortgage markets: Are in the midst of inflation, or not? Everytime we see strong data in one sector of […]

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How Consumer Spending Changes Mortgage Rates

April 17, 2007

If the data is correct, the U.S. consumers keep doing what they do best — consume. Despite weak consumer confidence surveys, retail sales posted a 0.7% gain, according to the U.S. Census Bureau.  This means that despite rising costs, Americans continue to fuel the economy. Speaking of fuel, a large reason for the unexpectedly large […]

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This Year, Taxes Are Due April 17

April 16, 2007

Just a reminder that taxes are due tomorrow, April 17 — even if your tax documents state otherwise.  This is because of Emancipation Day, a legal holiday in the District of Columbia. Emancipation Day dates to April 16, 1862 when President Abraham Lincoln signed a bill ending slavery in that area.  When IRS deadlines fall […]

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Until Bonds Get More Press, You’re Going To Have To Find An Advisor You Trust

April 13, 2007

Unlike the stock market, it’s hard for the average person to know when the bond market is getting turned upside-down. So, looking back at last Friday, when mortgage rates jumped very, very quickly in a short period of time, a lot of people got surprised (and burned). With stocks, we can all turn on CNBC, Bloomberg, […]

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Markets Turned Quickly And Left Rate Shoppers In Their Wake

April 12, 2007

So, just how quickly have the markets turned? According to Fed Futures Trading as watched by the Cleveland Federal Reserve, on March 13, it was as likely that the August Fed Funds Rate level would be 5.250% as it would be 5.000%. In other words, markets were betting with equal odds that the Fed would […]

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Wealthy Americans Are 25% More Likely To Hold Mortgage Debt

April 11, 2007

Interesting fact of the day: 55.5% of “wealthy” Americans have mortgages on their primary homes vs. 44.6% of the overall population. This doesn’t mean that the wealthy are more indebted than the rest of us; it means that the wealthy are maximizing the tax deductions that the IRS makes available to every homeowner in the […]

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Three Fed Speakers On Tap For Today

April 10, 2007

With three members of the Federal Reserve scheduled to speak today, don’t be surprised if mortgage rates show some brief volatility. Despite weakness in housing, the economy has shown resiliency and continues to push forward.  Markets had widely expected a slowdown, but are now having to change course — rapidly.  T his is why mortgage […]

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The Week In Review (April 9, 2007) : What To Watch For

April 9, 2007

On strength in jobs and hiring, mortgage rates finished last week at their highest levels in six weeks. It was a slow week last week until Friday when — with the stock market closed for Good Friday and with most bond traders on early vacation — the Non-Farms Payroll report handily beat expectations. This created […]

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Good Friday + Jobs Report Data = Major Mortgage Rates Movement

April 6, 2007

Today’s mortgage rates are getting slammed on the heels of the Non-Farm Payrolls report.  Instead of hitting the consensus estimate figure of 135,000 jobs, the report showed a very large 180,000 new jobs created in March. Unemployment levels dropped to 4.4% pointing to underlying strength in the economy. Mortgage bonds are selling off right now […]

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The Magic of Video Games: Ride the 117-Year Housing Roller Coaster

April 5, 2007

Want some help putting home values in historical perspective? Using the video game Roller Coaster Tycoon, Speculative Bubble created a roller coaster whose tracks follow home values (adjusted for inflation) from 1890 to 2007. The ride lasts three-and-a-half minutes, but the last thirty seconds really hammer home the point. You can almost hear the people […]

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The Domino Effect of Sub-Prime Lending on Move-Up Home Buyers

April 4, 2007

Wondering how the dramatic change in sub-prime mortgage lending will impact you? Try this stat on for size: Since 1998, 1.4 million families have used sub-prime mortgages to buy their first home. As sub-prime lending guidelines get tighter, there will be fewer first-time home buyers and that impacts every homeowner in the country. The reason […]

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It’s A Waiting Game Until Thursday Afternoon

April 3, 2007

There is little on the domestic front to move markets today as traders wait for Friday’s jobs report. The jobs data will take on more significance this month than in recent months because of Ben Bernanke’s testimony to Congress last week. The Fed Chief spoke more strongly about inflation that we’ve heard from him in […]

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