Long Beach Mortgage Rates Report: August 3, 2007

There is a mortgage liquidity crisis.  Wall Street has decided that borrowers who can’t prove that they have the ability to make their mortgage payments are risky.  What does it mean if you are searching for a Long Beach home?  This mortgage rates report will focus on the REAL story.  There is no need to panic if you are a financeable borrower.  

The liquidity crisis is simply an adjustment in pricing by Wall Street.  They want to be compensated for the additional risk they take on “imperfect loans”. Think of the imperfect loans like a life insurance contract.  If an epidemic broke out in California, and reduced the life expectancy of males in Southern California, the insurance premiums would rise.  Why?  The insurance companies want to be fairly compensated for the additional risk risk they’re taking.   The “epidemic” that hit this country was risky loan products.  Borrowers are having problems making their payments on these products.  Wall Street wants to be compensated for the additional risk these borrowers give them.

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Posted on August 3, 2007 by Laurie Manny

Long Beach Mortgage Rates Report: July 30, 2007

This could be a pivotal week for mortgage rates.  If you are buying or refinancing a home in Long Beach, you should pay heed to the advice I’ve been giving this past week.  We are still advising clients to Cautiously Float their rate.  This means that you should be prepared to lock-in the rate on your loan program quickly.  For detailed commentary, click through to the full story:

Tomorrow may be the defining day for the near-term future of mortgage rates.  The Core Personal Consumer Expenditures number will be out at 5:30AM, California time.  The PCE is essentially a measure of goods and services targeted towards individuals and consumed by individuals. This report is the Fed’s favorite gauge on inflation.  This number is due out for both June (measuring the change from May) and year over year.    A stronger than expected number suggests that the American consumer has not slowed down his spending; this would cause the Fed to consider raising rates.

The stock market is the 800 pound gorilla in the rate equation.  Should it continue its decline into August, money from stocks will flow into bonds; that would be positive for rates.  Our gut feeling is that the economy is sputtering on five cylinders and an economic slowdown is imminent.  Better rates should be on the horizon but we’ll continue to be cautiously optimistic.

I’ll be speaking at the Inman RE Connect conference in San Francisco this week so it may be hard to post timely information.  My intention is to post every other day but my schedule will cause me to be more reactive than proactive this week.  Keep checking back daily for breaking news.

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Posted on July 30, 2007 by Laurie Manny

Long Beach Mortgage Rates Report: July 27, 2007

Well, today’s Long Beach mortgage rates report begs you to deal with experts when buying a home in Long beach or refinancing your Long Beach mortgage.  The economic figures are mixed, suggesting that inflation isn’t a problem but that the housing market is weak.  Selecting a property in Long Beach and financing that property is going to require an expert if you want it done properly.  Buying a Long beach home will require an seasoned negotiator and a died-in-the-wool money geek to get you good mortgage terms.  I won’t bore you with Laurie’s resume but assure you that she’s all that.

I awoke this morning to a very friendly mortgage rates market and watched it deteriorate before my eyes in a matter of minutes.  The Gross Domestic Product figure was released an hour ago and was stronger than expected at 3.4%.  The underlying guage of core inflation, the Gross Domestic Product Deflator, was weaker than expected.    Conflicting data suggest that action needs to be taken if you haven’t locked-in a mortgage rate.

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Posted on July 27, 2007 by Laurie Manny

Mortgage Rates Report: July 24, 2007

Lower earnings reports by Google, Dupont, and a warning from Countrywide Financial is causing money to flow from stocks and into bonds.  That is positive for mortgage rates.  The conundrum is that weaker economic news can be potentially beneficial to Long Beach mortgage applicants. 

If you are buying a Long Beach home or refinancing your mortgage, we are advising you to cautiously float your interest rate, pending tomorrow’s economic data.  Data we’re watching tomorrow include:

Existing Home Sales for June, 2007 ( 5.9 million expected, down from 5.99 million in May)

Crude Oil Inventories

Both are out by 7:30 AM California time so I”ll post if we change our stance to locking.  If nothing’s here by 8AM, our position of cautiously floating still stands.

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Posted on July 24, 2007 by Laurie Manny

Long Beach Mortgage Rates Report: July 21, 2007

Oops!    It looks like my fears were unwarranted for Friday.  I was concerned that the markets were worried that the Fed wasn’t being hawkish enough on inflation and advised clients to lock-in interest rates.  Well, we got thrown a precious little gift on Friday morning when Google and Caterpillar reported lower than expected earnings which dragged down the stock market.  When money comes out of stocks, it flows into bonds (usually) and that is positive for interest rates.

The next big news item comes out on Wednesday when Existing Home Sales are reported.  As it stands, nobody is expecting the figure to be strong so we’ll retract our earlier recommendation to lock-in rates and advise you to cautiously float until Wednesday’s figure.  NOTE:  I said cautiously float; that means talking to your loan advisor each morning about what’s happening in the market.

Mortgage Rates as of 07/21/2007:

                                            Conforming             APR             Payment per $1,000           

5−Yr. Interest Only             6.125%                 6.195%                      $5.10                           
10 Yr Interest Only             6.5%                     6.618%                      $5.42                           
30 Year Fixed                    6.375%                  6.446%                      $6.24                            
Annual ARM                       5.375%                 5.442%                      $5.60                            
HELOC                              8.25%                   8.330%                      $6.88                           

*Rates are subject to change due to market fluctuations and borrower’s eligibility.

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Posted on July 21, 2007 by Laurie Manny