Weekly Update for May 18, 2012
Posted by Ben Wills in Team Building on May 18th, 2012
If ‘diamonds are a girl’s best friend’ then ‘fear’ is a bond’s best friend. The fear factor this week involved both Europe and banks globally. Worries over Greece pulling out of the Euro, worries over Spain’s banks going under, and the déjà vu of “I don’t know how it happened” regarding Chase’s loss of what now might be 5 billion dollars due to hedge trading, all sent investors running for safety. As I have said before, I don’t have to pay you as high of rate of return if you are going to give me your money anyway, and so bond traders, including Fannie and Freddie, were able to lower their rates slightly. Keep Spain and Europe on your radar. A melt down there would pull our economy off its recovery tracks, and that could lower rates even a bit more.
But before you get too excited, Freddie Mac’s survey came in just four 100ths of a percent lower this week – that’s .0004 lower than last week. Historical bottom, yes. Way lower than before, no. So we are still bumping against a floor that just doesn’t have much give.
And while the buzz about Facebook going public makes me wish I had an IPO of my own, I’m happy to be in the best mortgage lending environment in the past 3 years. By my way of thinking, you just can’t loose buying a house in today’s market.
This week Freddie Mac’s 30 year fixed rate remains basically unchanged at 3.79% paying .8% in discount points. Have a great weekend and have your buyers call us so we can get them approved to buy.
