- 2 bedroom, 2 bath downtown San Jose new high rise condo for $354,550!
- Another building offering 3.99% financing this weekend with 5 units on special.
- and my favorite building's best floor plan 1 bedroom on special for $395,000. Great deals on the City Heights, 88 and Axis.
Call me to tour!
Friday, July 3, 2009
Mortgage Update July 2, 2009
Rates have been holding and slightly improving over the past week. Adding fuel to the fire for mortgage bonds today was a stinker of a jobs report. The Labor department reported a loss of 467,000 jobs in the month of June. The national unemployment rate rose to 9.5%, its highest since 1983. Any time there is negative economic news the safer fixed income investments such as mortgage bonds get the benefit.
On Monday of this week China, the largest holder of US debt, announced they will continue to purchase our Bonds as part of their current foreign-currency reserve policy. China holds $763B of the $6.45T in US debt. This was great for mortgage bonds as China’s buying has really helped to keep our interest rates low over the past several years. Why do they do it? They wish to devalue the Yuan against the dollar so their exports to the United States are cheaper for the American consumer. The United States is the largest buyer of manufactured goods from China, and they want to keep it that way! By weakening the Yuan against the dollar it helps to ensure that American demand for Chinese goods will remain strong. Mortgage bonds get the benefit of this when China buys our debt.
Turn times are starting to improve for conventional loans, which is great news for the purchase market. The reason is that the refinance boom came to a halt when rates went up and origination volume decreased significantly. Conventional underwriting is much faster than the past several months, but there are still delays from the new appraisal process started on May 1st of this year. Over all it’s good to see lenders getting caught up with underwriting. I would still allow extra time for condo deals and FHA. Contact us with specific scenario questions as it’s always case by case for turn times.
That’s it for this week. Have a great 4th of July!
Tony Guaraldi
Mortgage Consultant
On Monday of this week China, the largest holder of US debt, announced they will continue to purchase our Bonds as part of their current foreign-currency reserve policy. China holds $763B of the $6.45T in US debt. This was great for mortgage bonds as China’s buying has really helped to keep our interest rates low over the past several years. Why do they do it? They wish to devalue the Yuan against the dollar so their exports to the United States are cheaper for the American consumer. The United States is the largest buyer of manufactured goods from China, and they want to keep it that way! By weakening the Yuan against the dollar it helps to ensure that American demand for Chinese goods will remain strong. Mortgage bonds get the benefit of this when China buys our debt.
Turn times are starting to improve for conventional loans, which is great news for the purchase market. The reason is that the refinance boom came to a halt when rates went up and origination volume decreased significantly. Conventional underwriting is much faster than the past several months, but there are still delays from the new appraisal process started on May 1st of this year. Over all it’s good to see lenders getting caught up with underwriting. I would still allow extra time for condo deals and FHA. Contact us with specific scenario questions as it’s always case by case for turn times.
That’s it for this week. Have a great 4th of July!
Tony Guaraldi
Mortgage Consultant
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