2009 is starting off just as 2008 ended.
The Mortgage Bond Market is still on its roller cooster ride. Moves in the market of 100 bases points have became the norm. Anyone looking to take advantage of the current low rates should speak with a mortgage broker and get full approval before locking in your rate. The Banks will tell you they will do a free rate float down but guess again. Nothing cost nothing and in the current market enviroment one set of guidelines give you few options.
2009 is going to be the year of great economic recovery but first we have to over come a few things. First and foremost the banks need to stop cutting apprasail values. We all know that the banks are fire saleing the foreclosures with little to no regard to what it does to the people that live in the area. These reduced prices along with low mortgage rates make buying a home in most cases cheaper than renting.
Hear are some bullet points at the cose of the Bond Market yesterday;
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The benchmark FNMA 4.5% bond traded within an expanded 95bp intraday range before ending with a 38bp gain at $101.53.
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There was little economic news to drive the markets today, but Fed buying of MBS drove mortgage bond prices higher.
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Grim December vehicle sales were reported with sales for Chrysler plunging -53%, Toyota -36.7%, Honda -34.7%, Ford -32%, GM -31%, and Nissan -30.7%.
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This does not bode well for future employment reports. Construction Spending fell less than expected in November at -0.6% vs. a consensus of -1.2%.
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President-elect Obama is proposing an economic stimulus program of tax cuts and spending proposals up to $775 billion with 40% marked for targeted tax cuts.
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The stock market was trimmed with some profit taking and by analyst downgrades of the telecom and financial sectors.
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The Dow retreated 81 points to close at 8,952 while the broader S&P 500 Index fell 4 points to finish at 927.
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The NASDAQ Composite Index also lost 4 points to close at 1,628.
D Fragoso