What is Happening in the Mortgage Market

Mortgage Bonds are trading nicely higher this morning at the expense of Stocks, which are under selling pressure following news that England and Germany have said their economies will be slower to recover than previously thought. This is driving mortgage rates down roughly 0.125% lower than yesterday.  Review our home page for today's rates, www.MortgageProsUs.com

Also adding pressure to Stocks was a worse than expected Retail Sales Report, which showed consumers tightening their purse strings. Retail Sales for April came in at -0.4% versus the 0.0% expected and after stripping out auto sales, the number was -0.5%, quite a bit lower than expectations of 0.2%. Adding to the weakness of the Report were downward revisions to the prior month's numbers, thereby making those already lousy readings even worse. It was the 8th decline in the last 10 months for headline Retail Sales, and until we see a boost in consumer confidence and further improvement in the job market, Retail Sales will likely languish.

Bond prices are higher so far this morning, but already well off the best levels seen earlier in the day. A look at the Bond Page shows prices piercing overhead resistance at $100.31 but then backing off and moving lower. You can also see how the last two times we visited this level, pricing worsened rather quickly. Bottom line - continue to float carefully, and be ready to act upon a reversal.

Richard Woodward

Banker / Senior Branch Manager

Because You Deserve The Best

Mortgage Pros is Now Envoy Mortgage

Office: (972) 661-5136 Fax: (972) 314-9647

17311 Dallas Parkway Suite 173 Dallas, TX 75248

Visit Us Online - www.MortgageProsUs.com

Residential and Commercial Mortgages

Mortgage rates are holding steady this morning. This on the heels of yesterday's steep selloff of bonds- so what happened? The overall Bond market was hit with a double whammy, which pressured prices lower throughout the entire day causing mortgage rates to rise dramatically.

First - the Treasury announced that it was going to sell $162B worth of Bonds next week. That is an enormous amount of paper that has to be absorbed by the market and the additional supply may make it difficult for Bond prices to make any meaningful gains. The Government has to issue all this debt and much more to pay for the massive stimulus programs.

Because of the additional indebtedness that the US now has to take on - literally mortgaging the future - there are concerns as to our government's ability to service this debt without having to print additional money. Beating the drum on that specific issue was Pimco's Bill Gross who more or less said, the US will eventually lose it's AAA credit rating. Although he did not see this happening anytime soon an already jittery Bond market sold off further.

The New York Federal Reserve purchased another $25B in Mortgage Backed Securities from May 14 through May 20, bringing the year-to-date total to $482B, out of the $1.25T that has been allotted. The coupons ranged from the 4% to 6% with no purchases of 3% or 3.5%. Rates can't improve much further unless the Fed goes in and buys significant amounts of the 3 to 3.5% Bonds.

There are no economic reports due for release today so rates should hold steady today. 

Get a free pre-approval or mortgage analysis by calling or appling online at www.mortgageprosus.com   972-661-5136 local or 866-430-7767 toll free.

Richard Woodward

Banker / Senior Branch Manager

Because You Deserve The Best

Office: (972) 661-5136

17311 Dallas Parkway Suite 173 Dallas, TX 75248

Visit Us Online - www.MortgageProsUs.com

On Tuesday, The Department of Housing and Urban Development's Federal Housing Administration said it will allow first-time homebuyers to use the federal tax credit of up to $8,000 for a downpayment at closing.  FHA will allow approved lenders and nonprofits, and state and local government agencies to issue short-term bridge loans buyers can use for down payments.  Buyers would repay the loans after getting their tax refunds.  This could be good news for first time home buyers, which are slated to account for 53% of home purchases in 2009 - but unfortunately, there isn't much we can do until the details of the program are fully released, and in turn accepted by lenders. I will updated my blog when the details come out.

Rates are hold steady today after bouncing around in response to mixed economic data.