There are no economic reports scheduled to be released today, so most market movement that we see will be a result of other news items, and there are a few issues that are causing stocks to sell off while mortgage backed securities and treasury bonds rally. Generally speaking, those issues are rising tensions in the middle east, uncertainty other Thursday’s Greek debt exchange, and the apparent economic slowdown in China.
Considerable uncertainty surrounds the upcoming Greek debt swap. If less than 66% of Greek’s debt holders agree to swap their old debt for new debt (taking a considerable haircut in the process), there is no deal. If more than 75% of Greek debt holders agree, there is a deal and a cramdown, if more than 95% agree, there is a deal and no cramdown. If the number falls between 66%-75%, it is somewhat unclear what happens. In any case, there is still the possibility that we see some sort of disorderly Greek default, and that has the markets spooked this morning.
China announced this morning that it would cut its annual GDP target from 8% to 7.5%. This is the first cut in target growth in eight years. Slowing growth in China will likely have an adverse impact on the worldwide economy, and this is also roiling markets today.
Lastly, there is the possibility of conflict between Israel (and maybe the United States) and Iran looms over everything. Tensions have been ratcheted up over the past several weeks and war is a distinct possibility. War in the middle east could cause the price of oil to skyrocket (especially if the Straight of Hormuz is closed). This would put a huge damper on the global economy.
In light of all the bad news, we are seeing mortgage rates fall today. The possibility remains that this is a temporary reprieve. If the Greek swap goes well on Thursday, and positive employment numbers come out on Friday, we could give back all the ground we are making up today and more. I still think that the stage is set for rates to increase over the next couple of months because the U.S. economy appears to be slowly improving.
Some of Our Most Popular Rates and Products*:
|Mortgage Product||Mortgage Rates||APR|
|30 Year Fixed Conventional Mortgage||3.625%||3.741%|
|20 Year Fixed Conventional Mortgage||3.500%||3.661%|
|15 Year Fixed Conventional Mortgage||3.125%||3.331%|
|30 Year Fixed FHA Mortgage||3.625%||4.975%|
|15 Year Fixed Conforming Jumbo||3.500%||3.670%|
|30 Year Fixed Conforming Jumbo||4.375%||4.474%|
|5/1 Adjustable Rate Mortgage||2.375%||2.752%|
|5/1 Adjustable Rate Conforming Jumbo Mortgage||2.750%||2.711%|
***Mortgage fluctuate all the time. The above rates were quoted at 1:12 A.M., on March 6, 2012. Call 877-868-2503 for more details.***
Today’s News, Links, and Stuff I’m reading:
LA Times: China Lowers GDP Growth Target for the First Time in 8 Years. This is causing stocks to drop this morning.
Felix Salmon: How all CDS are at risk of not paying out.
The Telegraph: Spain’s Sovereign Thunderclap and the End of Merkel’s Europe. Spain’s economy dwarfs Greece and poses a much larger threat to Europe.
Naked Capitalism: Europe’s Recession Has Barely Begun. Things are going to get a whole lot worse in Europe in the near future.
Washington Post: Why an MRI Costs $1080 in America and $280 in France.
Housing Wire: Repeat Foreclosures Hit an All-Time High in January.
Boston Real Estate Now: Some Points From a Propane Pro. On the differences in natural gas, oil, and propane for home heating.
Bloomberg: Goldman’s Secret Greece Loan Reveals Sinners.
Housing Wire: Home Price Declines Resilient Against REO Saturation: Clear Capital. I still do not buy any of the cheerleading for the “recovering housing market”.
* All rates shown are for 30 day rate locks. Longer locks are available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 1 point, a $495 application fee, $400 appraisal fee, $799 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $400 appraisal fee, $799 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $450 appraisal fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants with 720 or higher FICO and 80 LTV and are subject to mortgage approval with full documentation of income. All rates are subject to change without notice. All rates shown are for 30 day rate locks with 1 point unless otherwise noted.