Market Update
Friday April 8th, 2011 6:30 PM ET
By John Sauro
Budget Uncertainty Pressures Bonds
Mortgage Bonds opened the day sharply lower as it remains very uncertain whether Congress will get a budget agreement passed in time to avoid a government shutdown. The uncertainty is pushing the US Dollar lower, and applying pressure on US Bonds.
Also adding pressure on the US Dollar and Bonds is yesterday’s ECB Rate Hike. The ECB raised their benchmark rate by.25% to 1.25% in an effort to fight off inflation. The Euro now trades at its highest level against the US Dollar since January 2010. My bias is toward locking into interest rates.
That said, home loan rates are still very low, buyers should get out and buy a home and those who did not refinance, should. Soon the Fed and the Treasury will both be selling off their MBS holdings, and it will be tough to see mortgage rates stay low once that selling starts.
The spring housing market is under way with some areas reporting strong activity particularly for homes with prices above $1.5M.
There was no economic news on the calendar this week except for the Initial Jobless claims which fell by 10,000 in the latest week to 382,00.
Update on FINREG (Financial Regulation)
Protect your homes value and your right to affordable home financing.
The US Court of Appeals made a final ruling Tuesday and denied the National Association of Mortgage Brokers and National Association of Independent Housing Professionals appeal. The fight has just begun, as we will now focus on repealing Dodd-Frank.
Go to www.RepealFinreg.com and see why these regulations will further cripple the lending and housing markets.