Written By — Chad Emerson
Good morning to all, here is this week’s update. As I write, Wall Street is abuzz with activity as the Dow is up nearly 190, and Nasdaq up 46 ticks. The mortgage-backed securities are at about minus seven, however this is simply corrective action after the gains from the week, putting mortgage-backed securities back near the levels shortly after the Labor Day Holiday.
The numbers were in today from the Commerce Department. First-time jobless benefits grew by an unexpected 12,000 causing investors to fall in love with treasuries and MBS again earlier this week, plus new home sales were flat for August, which simply added fuel to the fire. The good news for the economy this week was the existing home sales grew from the lowest level on record, to just the second lowest level on record! Many of you noticed the sarcasm in that statement no doubt. Also durable goods orders for August dropped 1.3% to the projected 1.4% drop from forecasters.
The long and the short of our current economical situation — unemployment is still alarmingly high, and until the demand for American goods increases, the unemployment rate will continue to remain high. Until the labor market recovers, the Fed’s “Quantitative Easening” programs aren’t going to have any impact on the direction of mortgage rates because the slow growth of our economy is already keeping mortgage rates at or near their lowest levels ever.
Looking ahead to next week, the Fed will be auctioning off 2, 5, and 7 year notes. If foreign investment is good, we may see interest rates drop by 1/8 of a percent, and the exact opposite effect if the auctions draw modest to poor sentiment.
Today’s investor rates for 20% down SFR and 25% Duplex is between 5.125 and 5.250%.
Thank you — and enjoy your weekend.
Chad Emerson
NMLS I.D.#: 232133
Senior Loan Officer
PrimeLending
270 N. Loop 1604 E., Ste. 310
San Antonio, TX 78232
Office Direct: (210) 483-4962
Mobile: (210) 557-6320
E-Fax: 1-(866) 217-8894
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