Today Mortgage Bonds are trading higher in reaction to weakness in the Stock Market. Adding to this was Best Buy and Macy’s lowering their expected earnings through the Holiday season. Best Buy released a statement saying there has been a “rapid, seismic” slowdown in consumer spending.
I was listening to some experts on the radio this morning as they talked about what next in the mortgage and real estate meltdown. The whole time I’m screaming at the radio in my car “It’s not a mortgage problem! It’s an employment problem that is making it so people can’t pay their mortgages, or their credit cards, or buy anything for that matter!
But they keep diverting the public’s attention from the real problem. The mortgage meltdown is simply a symptom of a much bigger illness: dramatic increases in unemployment in the U.S.
If people had jobs, or their hours hadn’t been cut back, or they weren’t in fear of losing their jobs, they’d be out spending money. Or at least they’d be able to make their existing mortgage payment and credit card payments and auto payments.
Back to business at hand. There is no economic news set for today, but the Fed is auctioning-off $20 billion in 10-year notes. If the auction is not well received by investors it could dampen the current rally Bonds are experiencing. In fact today, rates have already repriced for the better twice from where they started at this morning.
So for now, if you are closing a loan anytime soon, I recommend carefully floating.
For Salt Lake City, UT this morning’s mortgage rates are as follows:
30-year fixed: 5.875%
20-year fixed: 5.750%
15-year fixed: 5.500%
FHA 30-year fixed: 6.000%