Home Loan Rates Improving

August 2008 “EVERY DAY YOU MAY MAKE PROGRESS.” Winston Churchill. And after recent weeks of progressing in a down direction, Bonds and home loan rates finally managed to make some progress in the right direction last week, with home loan rates improving by .125% from where they began. The biggest newsmaker occurred when President Bush signed into law HR 3221, the “Housing and Economic Recovery Act of 2008,” which is a sweeping $300 Billion rescue plan to help struggling homeowners avoid foreclosure, and to boost confidence in the sluggish housing market. This bill is several hundred pages long, and there have already been hundreds of articles, summaries, and analyses of the bill from the media, many with conflicting and inconsistent data. Rest assured I am deciphering how this law may impact or benefit you, and in the meantime, read the article below for a few notable items from the legislation. Now remember, negative economic news typically causes money to flow out of Stocks and into Bonds, and several items had that very effect last week, which helped Bonds and home loan rates progress toward improvement. Weak economic data out of Europe, sour comments from Fed President Gary Stern stating that “headwinds to the economy haven’t diminished and are possibly getting worse, setting the stage for a lengthy period of weakness like that seen in the early 1990s”, and a worse than expected Gross Domestic Product Report – which is the broadest measure of activity in our economy – all worked to give Bonds a boost. But there was some positive economic news…like lower oil prices and a better than expected Consumer Confidence Report, which helped money flow back into Stocks from Bonds. That stopped Bonds and home loan rates from making any bigger improvements. In addition, while Friday’s Jobs Report was better than the expected loss of 75,000 jobs, it still showed that 51,000 jobs were lost in July and that the unemployment rate sits at its highest level in four years. As a result of these negative details, the better than expected Jobs Report didn’t cause Bonds and home loan rates to worsen as much as they could have. Blog: Compliments of Gregg Mullery
Did you like this? Share it:

Comments are closed.