Interest rates are not “one size fits all”. Lenders evaluate a number of factors when setting the interest rate for each particular loan. These factors generally represent different levels of risk to the lender, which in turn, determines how much the lender will charge. For example, a borrower who is purchasing an investment property is considered a higher risk than a buyer who is purchasing an owner occupied primary residence.
The above example is very basic, but is important to know. Lenders often advertise rates, but in order to know what rate may apply to your transaction requires that all the details be discussed with the lender. Listed below are some of the common factors that can influence your interest rate.
Purchase or Refinance
Purchases get the best rates. If this is a refi, your rate may be higher if you are taking cash out.
Loan Size
Jumbo interest rates (for loan amounts over $417,000) may be higher than loan amounts below $417,000. Also, very small loans, or large loans can have higher rates.
Length of Lock
The longer the lock period, the higher the rate
Property Type
Multi-unit buildings, high rise condos, co-ops may have a higher rate
Credit Score
Lower credit scores may mean higher rates
Loan-to-Value
Zero down loans, or loans with little down payment are considered more risky than loans with larger down payments. Generally speaking, low or no down payment will lead to a higher rate
Occupancy Type
Owner occupied primary homes get the best rate. Second homes and investment properties may be higher.
Pre-Payment Penalty
If the buyer is willing to have a pre-payment penalty, the rate may be slightly lower.
Level of Income and/or Asset Verification
Full disclosure of income and assets will get you the lowest rates.
Tax Escrows
Waiving your tax escrows combined with a low down payment may lead to a slightly higher rate.
Wednesday, November 28, 2007
Tuesday, November 27, 2007
No Change to Loan Limits for 2008
Inman News
The conforming loan limit for mortgages purchased by Fannie Mae and Freddie Mac will remain at $417,000 next year, while debate continues over whether it will be lowered in 2009 to reflect falling home prices.
The Office of Federal Housing Enterprise Oversight (OFHEO) determines the conforming loan limit according to the average home price as reported each November by the Federal Housing Finance Board (FHFB).
OFHEO today followed through on a previous promise to leave the conforming loan limit unchanged in 2008, despite today's announcement by FHFB that the average U.S. house price fell 3.49 percent in 2007, to $295,573.
"While the house-price survey data used in determining the conforming loan limit show a decline over the past year, as previously announced and consistent with the proposed new conforming loan limit guidance, the level will remain at $417,000 for the third straight year," OFHEO Director James Lockhart said in a press release.
FHFB calculated that prices fell 0.16 percent in 2006, which OFHEO determined was a small enough decline to allow a corresponding adjustment in the conforming loan limit to be postponed. That means there has now been a cumulative two-year decline in average home price of 3.65 percent without an adjustment to the conforming loan limit.
In October, OFHEO said it would leave the conforming loan limit at $417,000 in 2008, no matter how drastically prices declined in 2007. But if cumulative home-price declines in 2006, 2007 and 2008 exceeded 3 percent, the limit would be adjusted accordingly in 2009, OFHEO proposed.
By looking at cumulative price declines over a three-year period, OFHEO left open the possibility that any reduction in the conforming loan limit could be lessened or eliminated altogether if home prices rebound in 2008. But industry groups representing lenders, home builders and Realtors have objected to the plan, questioning whether OFHEO has the legal authority to reduce the conforming loan limit.
OFHEO initially put forward the proposal on June 20, and published revised procedures for calculating the conforming loan limit on Oct. 22. The comment period on the revised procedures has closed and OFHEO said it is reviewing comments received.
Because investors have shunned the secondary market for "jumbo loans" that exceed the conforming loan limit, some lawmakers want to raise the conforming loan limit to allow Fannie and Freddie to play a greater role in purchasing or guaranteeing such loans.
A bill approved by the House in May, HR 1427, would allow Fannie and Freddie to securitize loans up to $625,000 in areas where the median home price exceeds the conforming loan limit.
Although Bush administration officials have said they might go along with allowing Fannie and Freddie to guarantee loans that exceed the $417,000 conforming loan limit on a temporary basis, they object to allowing the mortgage repurchasers holding such loans in their investment portfolios.
The conforming loan limit for mortgages purchased by Fannie Mae and Freddie Mac will remain at $417,000 next year, while debate continues over whether it will be lowered in 2009 to reflect falling home prices.
The Office of Federal Housing Enterprise Oversight (OFHEO) determines the conforming loan limit according to the average home price as reported each November by the Federal Housing Finance Board (FHFB).
OFHEO today followed through on a previous promise to leave the conforming loan limit unchanged in 2008, despite today's announcement by FHFB that the average U.S. house price fell 3.49 percent in 2007, to $295,573.
"While the house-price survey data used in determining the conforming loan limit show a decline over the past year, as previously announced and consistent with the proposed new conforming loan limit guidance, the level will remain at $417,000 for the third straight year," OFHEO Director James Lockhart said in a press release.
FHFB calculated that prices fell 0.16 percent in 2006, which OFHEO determined was a small enough decline to allow a corresponding adjustment in the conforming loan limit to be postponed. That means there has now been a cumulative two-year decline in average home price of 3.65 percent without an adjustment to the conforming loan limit.
In October, OFHEO said it would leave the conforming loan limit at $417,000 in 2008, no matter how drastically prices declined in 2007. But if cumulative home-price declines in 2006, 2007 and 2008 exceeded 3 percent, the limit would be adjusted accordingly in 2009, OFHEO proposed.
By looking at cumulative price declines over a three-year period, OFHEO left open the possibility that any reduction in the conforming loan limit could be lessened or eliminated altogether if home prices rebound in 2008. But industry groups representing lenders, home builders and Realtors have objected to the plan, questioning whether OFHEO has the legal authority to reduce the conforming loan limit.
OFHEO initially put forward the proposal on June 20, and published revised procedures for calculating the conforming loan limit on Oct. 22. The comment period on the revised procedures has closed and OFHEO said it is reviewing comments received.
Because investors have shunned the secondary market for "jumbo loans" that exceed the conforming loan limit, some lawmakers want to raise the conforming loan limit to allow Fannie and Freddie to play a greater role in purchasing or guaranteeing such loans.
A bill approved by the House in May, HR 1427, would allow Fannie and Freddie to securitize loans up to $625,000 in areas where the median home price exceeds the conforming loan limit.
Although Bush administration officials have said they might go along with allowing Fannie and Freddie to guarantee loans that exceed the $417,000 conforming loan limit on a temporary basis, they object to allowing the mortgage repurchasers holding such loans in their investment portfolios.
Monday, November 26, 2007
Understanding ARMs
Adjustable Rate Mortgages (ARMs) can be intimidating to new borrowers, but should not be overlooked. The key is to understand the variables involved, and then compare them against your short/long term goals. ARM's feature an interest rate that can change and Lender's offer superior rates on ARMs compared to fixed rate loans because they are not locked into providing the exact same rate to you for the next 30 or so years. ARM's let the lender adjust according to market conditions and inflation. When interest rates go up, your ARM can go up as well.
Comparing the difference between ARM's is more complicated than fixed rate loans because the start rate is only important until the rate begins to change. How much it can change, and when it will change are just as important to consider.The period of time between when your rate can change is the first variable to consider. Some ARM's can actually change every single month, starting in the next month after you close. Ever here those 1% ads on the radio? It's likely tied to a loan that changes monthly. It's more common for an ARM to change once a year, and in many cases, it will have a period of a fixed rates for a few years before it becomes adjustable.
For instance, a 5/1 ARM is fixed at the start rate for the first five years, then adjusts yearly. A 3/1 ARM is fixed for three years, then adjusts yearly. If you are pretty confident that you are going to move again in the next five years, a 5/1 has almost no downside to it. How much your loan can adjust, once the fixed period is over, is the second variable to consider. ARM's have caps that limit how much the rate can move at one time. Let's say your caps are 2 & 5. That means the rate can adjust as much as two percent a year (assuming your loan only adjusts once a year), and can never go above 5% over your original start rate. With a 5/1 ARM and 2&5 caps, in a worse case scenario, your rate would change as follows: Year One through five would be at 6%, Year Six - 8%, Year Seven - 10%, Year Ten through 30 - 11%.
Obviously, if you plan to live in a home for the next 30 years, with no intention of ever refinancing, an ARM like this may be a bad idea. But most folks would refinance or sell by the seventh year. That's a worse case scenario. Now let's look at how the rates will actually adjust. It might seem like the start rate is the only important number to consider here, but that's a mistake. The MARGIN plays the biggest role in how much your rate can change. Margin is one of those obscure figures that many loan companies try to breeze over. Always look at the margin if you think it's possible that you'll have this mortgage once it starts adjusting. So what is margin? It's a set number that gets added to an index, to determine what your rate will be. This is where it gets tricky, but stay with me.Different ARM's are based on economical standards called indexes. One index is the Monthly Treasury Average (MTA). Another and perhaps the most popular is the London Inter-bank Offered Rate (LIBOR) and yet other loans are based on US Treasury Bills.
Essentially indexes go up and down, depending on the market. In times of higher rates, these indexes are higher. Some indexes move up and down faster than the others. Currently, LIBOR is at are about 4.75%. Here's where the margin kicks in. When your rate starts to adjust, the margin is added to whatever the index is at the time, and that is your new rate. Let's look at a 5/1 ARM and assume that your five years are up today. Lets also say that your loan has a margin is 2.375% and the Start Rate was 6% with 2&5 Caps. If the Margin is 2.375% and the current LIBOR rate is 4.75% the rate for year 6 would be 7.125% (Index + Margin).
The rate for year 7 is determined the same way, index + margin. Keep in mind that ARMs don't just go up. If the index goes lower, so do your rates. Because ARM loans typically offer lower start rates than 30 yr fixed rate loans, if used properly, they can offer a nice savings to the borrower.
Comparing the difference between ARM's is more complicated than fixed rate loans because the start rate is only important until the rate begins to change. How much it can change, and when it will change are just as important to consider.The period of time between when your rate can change is the first variable to consider. Some ARM's can actually change every single month, starting in the next month after you close. Ever here those 1% ads on the radio? It's likely tied to a loan that changes monthly. It's more common for an ARM to change once a year, and in many cases, it will have a period of a fixed rates for a few years before it becomes adjustable.
For instance, a 5/1 ARM is fixed at the start rate for the first five years, then adjusts yearly. A 3/1 ARM is fixed for three years, then adjusts yearly. If you are pretty confident that you are going to move again in the next five years, a 5/1 has almost no downside to it. How much your loan can adjust, once the fixed period is over, is the second variable to consider. ARM's have caps that limit how much the rate can move at one time. Let's say your caps are 2 & 5. That means the rate can adjust as much as two percent a year (assuming your loan only adjusts once a year), and can never go above 5% over your original start rate. With a 5/1 ARM and 2&5 caps, in a worse case scenario, your rate would change as follows: Year One through five would be at 6%, Year Six - 8%, Year Seven - 10%, Year Ten through 30 - 11%.
Obviously, if you plan to live in a home for the next 30 years, with no intention of ever refinancing, an ARM like this may be a bad idea. But most folks would refinance or sell by the seventh year. That's a worse case scenario. Now let's look at how the rates will actually adjust. It might seem like the start rate is the only important number to consider here, but that's a mistake. The MARGIN plays the biggest role in how much your rate can change. Margin is one of those obscure figures that many loan companies try to breeze over. Always look at the margin if you think it's possible that you'll have this mortgage once it starts adjusting. So what is margin? It's a set number that gets added to an index, to determine what your rate will be. This is where it gets tricky, but stay with me.Different ARM's are based on economical standards called indexes. One index is the Monthly Treasury Average (MTA). Another and perhaps the most popular is the London Inter-bank Offered Rate (LIBOR) and yet other loans are based on US Treasury Bills.
Essentially indexes go up and down, depending on the market. In times of higher rates, these indexes are higher. Some indexes move up and down faster than the others. Currently, LIBOR is at are about 4.75%. Here's where the margin kicks in. When your rate starts to adjust, the margin is added to whatever the index is at the time, and that is your new rate. Let's look at a 5/1 ARM and assume that your five years are up today. Lets also say that your loan has a margin is 2.375% and the Start Rate was 6% with 2&5 Caps. If the Margin is 2.375% and the current LIBOR rate is 4.75% the rate for year 6 would be 7.125% (Index + Margin).
The rate for year 7 is determined the same way, index + margin. Keep in mind that ARMs don't just go up. If the index goes lower, so do your rates. Because ARM loans typically offer lower start rates than 30 yr fixed rate loans, if used properly, they can offer a nice savings to the borrower.
Interest rate buy-downs
Buying down the interest rate for the buyer of a property is a popular tactic among builders when the market slows. Builders will drop their prices if they must. But that's usually a last-ditch effort to move product.
First, most will try to broaden the market by offering to pay a lender to drop a buyer's rate a percentage point or two for the first two or three years. If builders do it, then there is absolutely no reason why individual sellers can't do it too. Not only does the technique stretch the market further than lowering prices, it has a greater impact on the buyer's monthly mortgage payment. And for most buyers, the bottom line is not so much the actual price of the house but how much they'll have to pay each month.
Buy-downs work like this: For a fee that is usually paid by the seller, a lender agrees to lower the buyer's mortgage rate in stair-step fashion for one to three years.
A typical buy-down, known as a "2-1" buy-down, calls for a rate that's 2 percentage points below market for the first year. In the loan's second year, the rate rises to 1 percentage point below the rate at the time the loan was made. And after two years, it goes up once again, this time to the original rate, where it remains for the life of the mortgage. Other popular versions include a 3-2-1 buy-down in which the rate is 3 points below market the first year, 2 points during the second year and 1 point in the third, and a condensed buy-down in which the rate rises every six months instead of every 12.
To see how the concept works, and why it's almost always a better bet than lowering your price, let's assume a $165,000 selling price. If a buyer puts up $16,500 in cash as a down payment, he or she would have to finance $150,000. And at 6 percent, the payment for principal and interest would be $899 a month.
However, if the seller agrees to pay the cost of a 2-1 buy-down, the buyer's monthly principal and interest payment at 4 percent for the first year would be $716, a difference of $183 a month or $2,196 a year. The payment would rise to $805 in the second year, but that's still a savings of $94 a month or $1,128 for the entire year. The payment would rise to $899 in the third year. But over the 24 months, the buyer's total savings is $3,324.
That's also what it would cost the seller to buy-down the buyer's interest rate. Of course, as an alternative, you could cut your price by the same amount. But since most conventional loans are approved based on the borrower's first-year interest rate, your universe of potential buyers would not be nearly as great.
Because most loans these days are based on the borrower's credit score instead of debt-to-income ratio, it's difficult to say with any certainty exactly how many more potential buyers would qualify to purchase your house at a lower rate. But it's easy to see how much more meaningful it is to lower the rate rather than the price by returning to the above example: If you cut the price by $3,324, which is the cost of the buy-down, the monthly payment at 6 percent would be $879. That's only a $20 difference versus $183 in savings resulting from the buy-down. With the buy-down, the eventual buyer in the example above only has to earn enough to afford a $716 a month house payment rather than $879.
The differences are even more striking on higher priced houses or when mortgages are more expensive. For example, on a $250,000 mortgage at 6 percent, the monthly payment is $1,499. But at 4 percent, it's just $1,194, a difference of $305. At 5 percent, the second year payment would be $1,342. But the total two-year savings would be $5,544. If the seller in this case "spent" that amount to lower the selling price and thus the buyer's mortgage to $244,456, the payment at 6 percent would be $1,465, or just $33 a month less than if the seller did absolutely nothing. There's a big difference between $305 a month and $33
First, most will try to broaden the market by offering to pay a lender to drop a buyer's rate a percentage point or two for the first two or three years. If builders do it, then there is absolutely no reason why individual sellers can't do it too. Not only does the technique stretch the market further than lowering prices, it has a greater impact on the buyer's monthly mortgage payment. And for most buyers, the bottom line is not so much the actual price of the house but how much they'll have to pay each month.
Buy-downs work like this: For a fee that is usually paid by the seller, a lender agrees to lower the buyer's mortgage rate in stair-step fashion for one to three years.
A typical buy-down, known as a "2-1" buy-down, calls for a rate that's 2 percentage points below market for the first year. In the loan's second year, the rate rises to 1 percentage point below the rate at the time the loan was made. And after two years, it goes up once again, this time to the original rate, where it remains for the life of the mortgage. Other popular versions include a 3-2-1 buy-down in which the rate is 3 points below market the first year, 2 points during the second year and 1 point in the third, and a condensed buy-down in which the rate rises every six months instead of every 12.
To see how the concept works, and why it's almost always a better bet than lowering your price, let's assume a $165,000 selling price. If a buyer puts up $16,500 in cash as a down payment, he or she would have to finance $150,000. And at 6 percent, the payment for principal and interest would be $899 a month.
However, if the seller agrees to pay the cost of a 2-1 buy-down, the buyer's monthly principal and interest payment at 4 percent for the first year would be $716, a difference of $183 a month or $2,196 a year. The payment would rise to $805 in the second year, but that's still a savings of $94 a month or $1,128 for the entire year. The payment would rise to $899 in the third year. But over the 24 months, the buyer's total savings is $3,324.
That's also what it would cost the seller to buy-down the buyer's interest rate. Of course, as an alternative, you could cut your price by the same amount. But since most conventional loans are approved based on the borrower's first-year interest rate, your universe of potential buyers would not be nearly as great.
Because most loans these days are based on the borrower's credit score instead of debt-to-income ratio, it's difficult to say with any certainty exactly how many more potential buyers would qualify to purchase your house at a lower rate. But it's easy to see how much more meaningful it is to lower the rate rather than the price by returning to the above example: If you cut the price by $3,324, which is the cost of the buy-down, the monthly payment at 6 percent would be $879. That's only a $20 difference versus $183 in savings resulting from the buy-down. With the buy-down, the eventual buyer in the example above only has to earn enough to afford a $716 a month house payment rather than $879.
The differences are even more striking on higher priced houses or when mortgages are more expensive. For example, on a $250,000 mortgage at 6 percent, the monthly payment is $1,499. But at 4 percent, it's just $1,194, a difference of $305. At 5 percent, the second year payment would be $1,342. But the total two-year savings would be $5,544. If the seller in this case "spent" that amount to lower the selling price and thus the buyer's mortgage to $244,456, the payment at 6 percent would be $1,465, or just $33 a month less than if the seller did absolutely nothing. There's a big difference between $305 a month and $33
The Week in Review for November 19
(mortgagemarketguide.com)
"I CAN SEE CLEARLY NOW, THE RAIN IS GONE..." Johnny Nash hit number one on the charts with this classic tune in 1972...and 35 years later, Fed Chairman Big Ben Bernanke is singing the same tune, mentioning in comments last week that the Fed would be more transparent so we all can see their policies clearly.
The new, improved, and more transparent Fed is a far cry from the days of "The Cryptic One"...Former Fed Chair Alan Greenspan, who was famous for his hidden messages. After a Greenspan speech, many traders were left scratching their heads and wondering what exactly was said. In sharp contrast, Bernanke has been very clear and easy to understand.
More importantly, Ben has done a good job of keeping inflation under control. The latest read on inflation was tame for last month, as a large jump in energy costs were offset by meek automobile, housing, and clothing prices. This suggests that higher oil prices haven't yet pushed up the prices of other goods overall.
But one topic that is still cloudy is the Fed's next move on December 11th. The latest chatter from the "more transparent" Fed indicates that the Fed will not cut - but traders in the pits are betting the ranch on another quarter-point cut. One thing is very clear - this topic will be debated right up until the Fed makes the announcement.
Bonds and home loan rates saw quite a bit of activity in the holiday shortened week, but ended up exactly where they started.
THANKSGIVING WITH ALL THE TRIMMINGS IS RIGHT AROUND THE CORNER...WILL YOUR WAISTLINE END UP EXACTLY WHERE IT STARTED? READ THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME INTERESTING TABLE TOPICS.
Forecast for the Week
What little economic news we'll have during this Thanksgiving Holiday shortened week takes place this Tuesday and Wednesday...and the market is scheduled to close early on Wednesday and Friday with a full-day close on Thursday.
The most interesting news of note for the coming week will be the latest housing data, coming with Tuesday's release of the Housing Starts and Building Permits report. Also on Tuesday, the Fed "unplugged"...the Minutes from the last Fed meeting will be released, providing the commentary and discussion between both voting and non-voting members. This may provide additional insight into the Federal Reserve's recent decision to cut rates by another quarter percent - and any unexpected comments could cause some movement in Bonds and home loan rates prior to the Thanksgiving Holiday.
In general, Bonds and home loan rates have improved in recent weeks - and until a catalyst arrives to knock Bonds and home loan rates off the "Up Escalator" of improvement, we will likely continue to see more of the same.
Chart: Fannie Mae 6.0% Mortgage Bond (Friday Nov 16, 2007)
The Mortgage Market View...
A DAY OF THANKS
Thanksgiving is upon us! This popular autumn holiday traces its roots back to a three-day feast held in 1621 to celebrate the blessing of a bountiful harvest. It took more than 240 years, however, for Thanksgiving to become a national holiday. In 1863, President Abraham Lincoln finally proclaimed the last Thursday of November as a national day of thanksgiving. Years later, President Franklin Roosevelt stated that Thanksgiving should always be celebrated on the fourth Thursday of the month--as opposed to the occasional fifth Thursday.
Mmmm... Eel and Seal. My favorite!
What exactly did the pilgrims eat at the first Thanksgiving? According to food historian Kathleen Curtin, the answer may surprise you. In addition to wild turkey, other popular sources of meat that were likely served include eel, clams, lobster, wild goose, eagles, venison, and seal...yes, seal. Peas, beans, and carrots were probably on the table, but sweet potatoes and corn on the cob weren't. And although pumpkins were likely consumed, pumpkin pie wasn't...because no such thing existed at that time.
Talking Turkey...272 Million Turkeys!
The popularity of turkeys during the holidays and throughout the year has turned turkey farming into a big business. In fact, the USDA National Agricultural Statistics Service estimates that 272 million turkeys will be raised in the US this year alone. That's an increase of 4% over 2006!
Weighing In on What We Eat
Ever wonder how many cranberries, pumpkins, and other Thanksgiving Day foods we go through each year? The US Census Bureau has the skinny! According to their research, the US produces some serious poundage when it comes to these holiday favorites, including:
690 million pounds of cranberries
1.6 billion pounds of sweet potatoes
1 billion pounds of pumpkins
841,280 tons of snap green beans
No wonder we feel so full after those holiday meals!
Can Turkey Really Make You Tired?
Here's how the story goes. Turkey contains tryptophan...which helps the body produce niacin...which then helps produce serotonin. And serotonin is the key to this theory because it calms the brain and induces sleep.
The problem with that theory is that tryptophan actually works best on an empty stomach-which most of us don't have after our Thanksgiving feast! So, it's more likely that the heaviness and the high carbohydrate content of the entire Thanksgiving meal are responsible for that sense of lethargy you feel, as your body works to digest it all. Add a glass of wine or a cocktail to your meal, and you'll increase that sense of sleepiness even more.
Here's to another happy Thanksgiving Day for you and yours! As always, if you have any questions or need any assistance, please don't hesitate to call.
The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
"I CAN SEE CLEARLY NOW, THE RAIN IS GONE..." Johnny Nash hit number one on the charts with this classic tune in 1972...and 35 years later, Fed Chairman Big Ben Bernanke is singing the same tune, mentioning in comments last week that the Fed would be more transparent so we all can see their policies clearly.
The new, improved, and more transparent Fed is a far cry from the days of "The Cryptic One"...Former Fed Chair Alan Greenspan, who was famous for his hidden messages. After a Greenspan speech, many traders were left scratching their heads and wondering what exactly was said. In sharp contrast, Bernanke has been very clear and easy to understand.
More importantly, Ben has done a good job of keeping inflation under control. The latest read on inflation was tame for last month, as a large jump in energy costs were offset by meek automobile, housing, and clothing prices. This suggests that higher oil prices haven't yet pushed up the prices of other goods overall.
But one topic that is still cloudy is the Fed's next move on December 11th. The latest chatter from the "more transparent" Fed indicates that the Fed will not cut - but traders in the pits are betting the ranch on another quarter-point cut. One thing is very clear - this topic will be debated right up until the Fed makes the announcement.
Bonds and home loan rates saw quite a bit of activity in the holiday shortened week, but ended up exactly where they started.
THANKSGIVING WITH ALL THE TRIMMINGS IS RIGHT AROUND THE CORNER...WILL YOUR WAISTLINE END UP EXACTLY WHERE IT STARTED? READ THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME INTERESTING TABLE TOPICS.
Forecast for the Week
What little economic news we'll have during this Thanksgiving Holiday shortened week takes place this Tuesday and Wednesday...and the market is scheduled to close early on Wednesday and Friday with a full-day close on Thursday.
The most interesting news of note for the coming week will be the latest housing data, coming with Tuesday's release of the Housing Starts and Building Permits report. Also on Tuesday, the Fed "unplugged"...the Minutes from the last Fed meeting will be released, providing the commentary and discussion between both voting and non-voting members. This may provide additional insight into the Federal Reserve's recent decision to cut rates by another quarter percent - and any unexpected comments could cause some movement in Bonds and home loan rates prior to the Thanksgiving Holiday.
In general, Bonds and home loan rates have improved in recent weeks - and until a catalyst arrives to knock Bonds and home loan rates off the "Up Escalator" of improvement, we will likely continue to see more of the same.
Chart: Fannie Mae 6.0% Mortgage Bond (Friday Nov 16, 2007)
The Mortgage Market View...
A DAY OF THANKS
Thanksgiving is upon us! This popular autumn holiday traces its roots back to a three-day feast held in 1621 to celebrate the blessing of a bountiful harvest. It took more than 240 years, however, for Thanksgiving to become a national holiday. In 1863, President Abraham Lincoln finally proclaimed the last Thursday of November as a national day of thanksgiving. Years later, President Franklin Roosevelt stated that Thanksgiving should always be celebrated on the fourth Thursday of the month--as opposed to the occasional fifth Thursday.
Mmmm... Eel and Seal. My favorite!
What exactly did the pilgrims eat at the first Thanksgiving? According to food historian Kathleen Curtin, the answer may surprise you. In addition to wild turkey, other popular sources of meat that were likely served include eel, clams, lobster, wild goose, eagles, venison, and seal...yes, seal. Peas, beans, and carrots were probably on the table, but sweet potatoes and corn on the cob weren't. And although pumpkins were likely consumed, pumpkin pie wasn't...because no such thing existed at that time.
Talking Turkey...272 Million Turkeys!
The popularity of turkeys during the holidays and throughout the year has turned turkey farming into a big business. In fact, the USDA National Agricultural Statistics Service estimates that 272 million turkeys will be raised in the US this year alone. That's an increase of 4% over 2006!
Weighing In on What We Eat
Ever wonder how many cranberries, pumpkins, and other Thanksgiving Day foods we go through each year? The US Census Bureau has the skinny! According to their research, the US produces some serious poundage when it comes to these holiday favorites, including:
690 million pounds of cranberries
1.6 billion pounds of sweet potatoes
1 billion pounds of pumpkins
841,280 tons of snap green beans
No wonder we feel so full after those holiday meals!
Can Turkey Really Make You Tired?
Here's how the story goes. Turkey contains tryptophan...which helps the body produce niacin...which then helps produce serotonin. And serotonin is the key to this theory because it calms the brain and induces sleep.
The problem with that theory is that tryptophan actually works best on an empty stomach-which most of us don't have after our Thanksgiving feast! So, it's more likely that the heaviness and the high carbohydrate content of the entire Thanksgiving meal are responsible for that sense of lethargy you feel, as your body works to digest it all. Add a glass of wine or a cocktail to your meal, and you'll increase that sense of sleepiness even more.
Here's to another happy Thanksgiving Day for you and yours! As always, if you have any questions or need any assistance, please don't hesitate to call.
The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
Subscribe to:
Posts (Atom)