The Bureau of Labor and Statistics released the Consumer Price Index (CPI) numbers for all urban consumers and over the last 12 months, the index has fallen over 2.1%. This is the largest decrease since January 1950.
What does this mean?
Well, the little mortgage birdie tells me that with bad economic news, interest rates usually improve. Silicon Valley home and property owners can expect a possible 0.125% improvement in interest rates today.
Another thing to keep an eye on is the government’s (Federal Reserve and the Treasury) involvement in purchasing mortgage backed securities per the Obama Stimulus Plan. Don’t expect this to last. The Fed has announced that they will be purchasing mortgage backed securities till the end of 2009, however the Treasury has announced that by October of this year, they will no longer be purchasing these securities. The tax credit for home purchases deadline is also going to be at the end of October.
Based on this information, there’s a high probability that rates will rise at the end of 2009
.
This said, no one knows for sure, but these are good data points to keep track of. One thing is for sure about real estate and tomorrow’s mortgage rates: they will either rise or fall. 
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Recent had a great chat with friend, mortgage broker, and East Bay Realtor David Tang Pitch Black movie download Streets of Blood the movie Persuasion on dvd Touch of Evil move
about the recent spike in mortgage interest rates. David has always provided some sound advice and updates on how the current real estate and finance markets are doing. This is what he had to say:
Mortgage rates took a big jump yesterday as investors looking at the United States Government’s efforts to sell nearly $2 TRILLION
in U.S. Treasury bonds this year to fund its various Stimulus programs decided that the risk of inflation and rising interest rates were too high at the current record low yields.
In addition, signs of a recovery in the United States and globally are prompting some investors to lighten their holdings in U.S. Treasuries in search of other opportunities with greater potential returns.
Mortgage rates jumped from 0.25% to 0.75% as banks and lenders tried to figure out what was
a reasonable rate to charge for mortgages in this new climate of potentially rising interest rates.
For potential home buyers and those considering a refinance, it would be strongly advised to double check with your lender to see if your rate was locked prior to Wednesday – and if not – what the new rate is going to be.
After a period of relative calm in the interest rate markets, it looks like there could be some turbulence ahead so make sure you get good counsel on what your options are to protecting your financial position.
If you or anyone you care about is interested in obtaining more information about real estate and mortgages, feel free to contact us
.
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A few weeks ago, I had posted some information about the new tax credits that were being made available from the Obama Plan to new home buyers, but there was limited information about what the government was doing for existing homeowners that were having problems with their mortgage.
Michelle Singletary of the Washington Post, had a great article yesterday detailing the new government website in conjunction with the Obama financial stability
Genova release plan to help homeowners struggling with their mortgage payments.
The Treasury Department and the Department of Housing and Urban Development have launched a Web site that provides basic information for troubled homeowners about the Obama administration’s “Making Home Affordable” program.
The site, http://www.makinghomeaffordable.gov, usefully arranges in one place information on the two-pronged approach of the new initiative.
There’s the refinancing part, designed to help homeowners who are paying their mortgages on time but are not able to refinance at the current low mortgage rates because of a decrease in the value of their homes.
The second prong is aimed at homeowners who are struggling to make their monthly mortgage payments because their interest rates have increased or their incomes have been reduced.
If you know of anyone struggling with their current mortgage payment, forward the Making Home Affordable website to them to see if they would be eligible for government assistance. Feel free to contact us
as well for further information and guidance.
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