The 30 year fixed rate is at 6.375% today before adjustments, if any.
Mortgage/Economy news:
Each piece of the three pieces of economic data today was very close to last month’s numbers, and forecasts were pretty accurate as well.
To start with, weekly jobless claims fell just a little from 386,000 to 381,000. Because this data comes out weekly, it is the trends and the ranges in which we’re most interested. The little ups and downs in between don’t mean nearly as much as the news reporters make them out to be. New claims have been in the mid to high 300K range for months now, which coincides with weak job growth.
The leading economic indicators index went from .0% to .1% in May. The index measures 10 different aspects of the economy to approximate what the overall economy will do over the next six months. A positive number suggests growth, but when it is hovering within in a couple tenths of a percentage point of 0, up or down, the signal is not quite as clear. We would have to say that right now it is basically telling us that there is a 50% chance of a stronger economy by the end of the year.
No matter how poorly the Empire State Index does, the Philadelphia Fed Survey outdoes it almost every time. The Philly Fed’s manufacturing index fell from 15.6 to 17.1 this month. The manufacturing sector has been consistently contracting for about the last two years. So, any manufacturing reports are only likely to have much impact on the markets if they come in much better than forecast, because the financial community already expects bad numbers.
The Federal Reserve, the Treasury Department, and the SEC are all in talks to figure out the investment bank liquidity issue. In the midst of the Bear Stearns collapse, Bernanke and the Fed had opened up funds to investment firms, money which had previously be reserved just for banks. The debate is over whether to allow the lending window open only temporarily or make it more permanent. They also want to put restrictions in place that prevent future lending irresponsibility. What they decide could be critical in dictating the pace of the economic recovery, not to mention how quickly recovery may begin.
Mortgage Hints: Which is better, Private Mortgage Insurance (PMI) or Lender Paid Mortgage Insurance (LPMI)? LPMI has the private mortgage insurance built into the interest rate. The answer is it depends on the customer’s needs and scenario. If the customer puts 15% down, the PMI solution may be a better fit since they only need 5% in appreciation, reduction of their mortgage or upgrades to the property or a combination of the three to drop PMI. Does that make sense? Call for details.
Thought of the day:
The world is a great mirror. It reflects back to you what you are. If you are loving, if you are friendly, if you are helpful, the world will prove loving and friendly and helpful to you. The world is what you are.
Thomas Dreier
(Provided by Steve Hale~Georgia Platinum Mortgage)
