Buyer Seller News - Long Beach Real Estate-Long Beach Homes and Condos For Sale

No real change in my posture. I still believe that Long Beach mortgage rates have room to go lower in the next 30-90 days but Im advising clients who are closing in less than 17 days to lock. All others can float.

Mortgage-backed securities traders have ˜baked in a .25% rate cut from the Fed when they meet tomorrow. If Bernanke doesnt cut, mortgage rates will jump quickly. This week is filled with economic data. If the data are reported weaker than the estimates, we could see lower mortgage rates in the next week. The risk of that not happening, in this volatile market, is real so Im sticking to the recommendation of locking your loans if you are closing before May 15.

Countrywide Financial reported a a big loss from foreclosures while MasterCard reported huge profits. While MasterCard doesnt actually issue the cards (they just make money from transactions), it shows that people are walking away from their mortgages and using credit cards more frequently. Traders think that Bernanke is fixing the financial crisis in this country but those two events should give you reason to deliberate. Were still bouncing around on choppy seas and should be through the end of the year. I just dont see Long Beach mortgage rates above the 6.5% level at all this year.

What a wild week this past one was for Long Beach mortgage rates. On April 14, 2008, I advised folks who were closing in the month of April to lock rates; mortgage bonds plummeted from 101 to 99.5. If you were closing in April and didnt lock your mortgage rate, it would have cost you about 1.5% in discount points to get that same mortgage rate, on Thursday- thats $7,500 extra in closing costs for a $500,000 loan!

I also advised that all May closings float. Mortgage bond prices rebounded to 100.5 today; I still think theres room for upside in the mortgage bond market which means lower mortgage rates. I dont have high hopes for the American economy through the summer. The foreclosures, weak housing prices, and credit crunch have closed the consumers ˜virtual ATM ˜. Higher food and fuel prices are starting to take a bite out of the consumers budget. A gallon of gas and a gallon of milk both cost in excess of $4. In past years, a homeowner would suck it up and throw the money on his HELOC. Now, with HELOCs frozen, the consumer has to tighten his belt.

The consumer drives much of the American economy so his tightened belt means less spending. That should hurt this economy until we see the banks loosen up a bit.

Will we see lower mortgage rates in May? I think so but the volatility of the mortgage bonds market still compels me to advise Long Beach home buyers to lock their mortgage rates for transactions closing within 14 days. All longer closings should float¦for now.