Rates
Well same old drumming, although the US economy seems to be ticking along at an OK pace, it is Europe and perticualy Spain that is mainly keeping rate where they are.
Spain this week indicated that they are in some serious trouble, with unemployment at 24%. Their budget projects didn't not forecast that high of unemployment, so their budgets are way off. Thus causing them to sink further in to the hole.
To make matters worse, their bond prices, i.e. what they can borrow money for is really high, as example the US is borrower money today at a 1.93% return, which Spain is topping the 6%.
so, with this happening, people are still flocking to US bonds, thus keeping them low, and thus keeping mortgage prices low.
And although this chart above looks kind of bad, it really doesn't, the trading has been very narrow, between 1.91 and 1.96%. Which means interest rate on mortgage have been fluctuating between a 3.75 and a 3.875, so hardly any movement.
What we really need to watch is 2 numbers, the 1st one is 1.90%, the bond has been only below that number for a few days, In order for Mortgage Rates to go below where they are now, the 10 year bond would need to trade, for about a week or more, consistently below the 1.90% mark.
On the flip side, we have the 2.20% mark, if we consistently traded above that, say for a week, we would start to see rates move up, towards the 4.00% mark.
Here is what I am telling clients right now, lock if you can, chances of rates going any lower are very slim, and if they do, we might only see a drop of .125 to .25. There is a greater likely hood of rates going up a .25 of a point than down a .25.
Get them while the getting is good!
Rural Development
Lots of rumors out there about RD loans and if Kuna is going to lose RD. I spoke directly with RD, and as of yesterday, there is nothing stating that Kuna is going to lose their RD status. Now that doesn't mean next month they will change their minds, but as of right now, RD is good!
RD also released a new interactive map to see what areas are qualified for RD loans, this is a GREAT map, and just because a city isn't RD, doesn't mean the outlying areas of that city are not RD.
RD is still 100% financing and VERY low mortgage insurance and rates as low as 3.75% (APR 4.22)
So always check the map, link to the map HERE!