A good day for interest rates!

Friday Phoenix mortgage interest rate update……….

I will continue to float over the weekend, but I caution not to let the locked loans pile up; keep your exposure from taking on too much risk. Like the market but not in love with it.  Interest rates have improved today.

If you were not watching the interest rate market early this morning you would think today wasn’t much of a day given the employment report this morning. As is the case most of the time, the employment report sets off hip shooting that results in lots of traders getting their pocket books lightened. Today when the unemployment rate hit 10.2% the bond market exploded in a strong rally, the stock index futures rolled down hard and mortgage prices jumped. It took about 30 minutes to settle down, then by 9:30 selling took over in the bond market and the DJIA traded up as much as 75 points at 9:50. Mortgage interest rates and treasuries dropped their gains, went negative, sat weaker for 30 minutes before returning to spend the rest of the day unchanged on the 10 yr and stock market while mortgages bounced back to levels at 9:30. Who cares? Lenders that priced before 9:30, market commentators like us and traders licking wounds on their knees. Just a rehash of how volatile the employment report usually is.

Non-farm job losses in Oct were more than expected, -190K; but were offset by a cumulative increase in job losses previously reported by 91K in Sept and October. The upward revisions were the saving grace and provided the spin the rest of the day. While unemployment is increasing and likely to hit 11% in the next year, it generally is pushed aside by traders in favor of the non-farm jobs counts; that is, when it is convenient. When unemployment rates begin to decline that data will be the focus. Still putting lipstick on the sow and trying to get her to the prom; the employment situation is getting worse, not better; no matter the spinners that see non-farm jobs only falling 200K a month as “good news”.

Consumers continue to cut credit; Sept declined $14.2B, mkts were expecting -$10B. The fourth consecutive month credit expansion declined. Banks are contributing by refusing to extend credit to otherwise qualified people.

President Obama signed legislation extending the $8,000 first-time homebuyer tax credit and giving additional tax breaks to certain homeowners trading up. Passed overwhelmingly by Congress, the bill would provide a $6,500 tax credit to homeowners who are buying a new primary residence beginning Dec. 1. The language mandates that to get the credit the homeowner must have owned their home for five consecutive years of the previous eight. But there are caps on the tax credits. They only apply to individual buyers who make no more than $125,000 and $250,000 for couples. There is also an anti-flipping provision: Any homeowner who collects the credit and sells within three years must return the money. The FTHB was extended to cover consumers signing a contract by April 30 and closing by June 30.

If you are a Phoenix Homebuyer and need a low interest rate loan, get started here

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