Long Beach Market Reports - Long Beach CA Homes and Condos Sales Statistics and Market Reports

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.

I'm still floating mortgage rates, unless my clients are closing within 14 days. I"m cautiously floating because of the volatility in the market. Fundamentally, mortgage rates shouldn't have a whole lot more room to come down; the Fed cuts are probably coming to an end. Something much more drastic than the Fed open market activities will be needed to pull us out of the recession.

Yep. I said the R word and have been since last fall. I'm not scared of the recession; I welcome it. Here's the trick for mortgage rates. The weak dollar has world investors believing that the Fed's easy money policy is inflationary...

UNTIL...

the recession hits them. Make no mistake about it, the economic slowdown is a global phenomenon. Canada and the UK are following suit by cutting rates. I think the world wide recession will lower oil prices and provide some much needed relief to the American consumer.

Nothing says it like pictures. I'll show you some charts, to see how I'm thinking.