Market Analysis

The bond market took a beating today due to a stronger than expected April Retail Sales report and various speeches by Federal Reserve officials that have led investors to begin to price in probabilities of interest rate increases by the Fed by the end of the year. Retail sales excluding cars grew 0.5% in April, well ahead of analysts' expectations for a gain of 0.2% and a nice follow through from a revised 0.4% gain in March. Excluding autos and gasoline, sales rose 0.6%, the best performance for this measure since November. Fed officials are clearly concerned about the economy and, should the economy sputter further, they do not want to be tagged as having been too optimistic, so they are being very careful to not be optimistic even when economic data like April's Retail Sales surprise the market. However, it appears that besides being available to inject capital or provide liquidity for the markets should another Bear Stearns happen or provide some form of targeted assistance to specific areas of credit tightening like the jumbo loan market, most Fed officials are suggesting that they have done what they could by slashing rates as far as they have and that the market will have to do the rest of the work by itself now. The Fed is clearly also concerned about being tagged with not having recognized an inflation problem before it gets sparked, and for the average person inflation is already sparked because we are paying more for food and gas. Tomorrow's Consumer Price Index (CPI) will be watched carefully. A stronger than expected # will likely cause more damage to rates tomorrow. We continue to recommend locking rather than betting that the market will bounce back. If the market does improve dramatically, we are able to renegotiate once and get within .375 points in closing costs of current market. For example, if the market improves to 5.625% with 0 points, we can renegotiate once to 5.625% with .375 points. Most of our borrowers who renegotiate are pleasantly surprised, as we tend to renegotiate at times when there is another brief window to get better than market rates. If you would like to be ready to lock with us, the first step is to be pre-approved. You can access a short application form at http://www.ironharbor.com/xSites/Mortgage/IronHarbor/Content/UploadedFiles/Iron%20Harbor%20Short%20Application.pdf
Posted by Matthew Breston on May 13th, 2008 4:17 PMPost a Comment (0)
Recent Posts:
Archive:
My Favorite Blogs:
Sites That Link to This Blog:

Broker NMLS #249828  Company NMLS #349828      Equal Housing Lender

 


Iron Harbor Mortgage, L.L.C. 815 Brazos, Suite 705 Austin, TX 78701
Phone: Fax:

Contact Us | Common Questions | Today's Rates | BBB Report Lookup | Loan for Purchase | Video Testimonial | Credit Report Errors | Privacy Policy | Loan Application | Loan Process | Market Analysis

Copyright © 2012 Iron Harbor Mortgage, L.L.C.
Portions Copyright © 2012 a la mode, inc.
Another XSite by a la mode, inc. | Admin Login| Terms of Use| Site Map