Oklahoma Funding Group Blog

Mortgage rates are trending lower this morning in response to remarks made by Chinese officials in which they expressed a willingness to continue purchasing U.S. Treasury Bonds for investment in its foreign exchange reserves. There is a large auction of 3 Year Treasury Notes later today. This could impact mortgage rates this afternoon. There is no economic data scheduled for release today.

The conventional wisdom continues to recommend that buyers let their interest rate float if their scheduled closing is as far out as 60 days or longer. 

We at the Red Rock Mortgage/Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

If you have a mortgage question, please email us at dpharp@okfundinggroup.com. 

The Labor Department gave us this morning's key report. It showed that the U.S. unemployment rate remained at 9.7% last month when forecasts had called for a 0.1% increase. The number of jobs lost in the month came in at 36,000 when analysts were expecting a loss of at least 50,000 jobs.

Mortgage rates are moving sharply higher this morning in reponse to this report.

Next week is fairly light in terms of economic releases, but it does bring us one very important report. There are also two relevant Treasury Bond auctions on the calendar, but none of the events that are likely to affect mortgage rates are scheduled for release Monday or Tuesday.

Economists had expected that the economy gained approximately 15,000 jobs in January, but that wasn't the case.  about 20,000 jobs were eliminated last month.  Although this is a negative number, at least it isn't higher.  The real surprise in the report released by The Labor Department the first Friday of each month, is that the unemployment rate dropped to 9.7%.  There could be several reasons for this drop, but it is a surprise nonetheless.

Looking at the big picture of the job market since the "Great Recession" began in December 2007, the U.S. economy shed a total of 8.4 million jobs.  Previously, it was estimated that 7.2 million jobs had been eliminated.

As the economy begins to strengthen, it makes sense that mortgage interest rates will begin to move higher due to the prospect of inflation.  This article discusses what might happen in the second half of 2009...

You've heard all the gloom and doom about this recession. Now here's some good news: the economic recovery could happen much sooner—and be much stronger—than anyone thought possible.

Though the latest economic data is still giving a mixed picture, a small but growing group of economists is disputing the idea that the recession will drag on for months and that the rebound will be as weak as those following the the 1991 and 2001 downturns.

“Too many people’s idea of recession have been formed by the last two recessions,” says Robert Brusca of Fact & Opinion Economics, referring to the 1991 and 2001 periods, which were both short and shallow. "I think that's mistaken.”

“People have been talking about an L-shaped recession,” adds Michael Mussa, senior fellow at the Peterson Institute for International Economics. “The record shows you come back sharply from deep recessions” like the current one.

These economists and others see a V-shaped pattern, similar to that of the recession-recovery periods of the 1970s and 1980s. And they say there is ample evidence to support it.

Among the reasons for the new optimism: a significant easing of the credit crunch, improvement in consumer spending, a potential bottom in housing, a less-grim jobs picture and expectations that the government's massive stimulus spending could start boosting economic growth sooner than later.

Even the Federal Reserve is signaling some optimism. After its regular two-day policy meeting ended on Wednesday, the central bank said that weakness in in the economy appeared to be slowing.

"Information received since the Federal Open Market Committee met in March indicates that the economy has continued to contract, though the pace of contraction appears to be somewhat slower," the Fed said in a statement, suggesting it had detected an improvement in the outlook.

"The tone seemed to have been a bit more optimistic than in the previous meetings," said Greg Salvaggio, vice president for trading at Tempus Consulting in Washington.

And on Thursday, the Economic Cycle Research Institute said that the recession will probably end before the summer is out.

The research group, whose leading indicators have a solid track record of predicting turns in the business cycle, said enough of its key gauges have turned upward to indicate with certainty that a recovery is coming.

"The economy is on the cusp of a growth rate cycle upturn—a cyclical acceleration in economic growth," ECRI said in an emailed statement. "In other words, U.S. economic growth...which is still plunging deeper into negative territory, will start becoming less negative in short order."

So far, the data is showing continued weakness, though there are signs the economy is turning the corner. On Thursday, the government reported that the number of U.S. workers filing new claims for unemployment benefits fell last week. Several economists say that jobless claims typically peak six to eight weeks before the economy recovers. Since that peak now appears to have been reached in March, that would signal the recession could be ending as soon as May.

"Job losses tend to be very bad at the end of a recession,” says Bank of Tokyo-Mitsubishi’s chief financial economist Christopher Rupkey.

Consumer spending also declined in March, the government said Thursday, as the weak job market continued to pressure incomes. But overall consumer spending, which makes up two thirds of the US economy, rose in the first quarter compared with the final quarter of 2008, another sign that Americans are slowly beginning to buy again.

No one, of course, is saying the recession is over yet. But the end may be closer than people think.

Though Wednesday's initial report on first-quarter GDP showed a bigger-than-expected decline, some economists now expect a flat or slightly negative showing in the second quarter, followed by the beginning of sustained growth in the third quarter. (That’s three months sooner than what many were forecasting several months ago.)

Optimists acknowledge that existing headwinds and unforeseen events can quickly derail momentum, which may help explain why many still fall into the wait-and-see camp.

“The velocity of downturn is lessening," says John J Castellani, chief economist and president of the Business Roundtable, who is more cautious than hopeful at this point. “In the initial part of the recovery, people will be very cautious about this being a double dip.”

Nevertheless, those forecasting a strong recovery point first and foremost to the waning effects of the Lehman Brothers collapse last fall, which roughly coincides with the worst of the credit crunch, and triggered a massive chain reaction in payroll and production cuts.

“The initial adjustment tends to be too big, then there’s some reversal of that,” says Ram Bhagavatula, managing director at the hedge fund, Combinatorics Capital.

That dynamic will lead to swifter and stronger recovery in both the economy and employment that many economists are forecasting.

All About The Economy

Economists cite several reasons for better labor market conditions this time. They expect job losses as well as the unemployment rate to peak close to the time growth bottoms out, as was the case in the 80s and 90s, and thus not resemble the jobless recoveries of the two most recent recessions.

“Once recovery starts, it won’t be long before the unemployment rate begins to decline,” says Mussa, who doesn’t see the jobless rate breaking 10 percent.

Though the recession of 2001 ended in November of that year, 12 months later the economy had added just 200,000 jobs. Moreover, the jobless rate kept rising through June of 2003.

By contrast, payroll losses bottomed out one month after the recession of 1982 ended in November. Payrolls were 3 million higher a year later.

No one is expecting such robust job growth this time, but economists say the relatively strong showing in productivity during this recession points to lean payrolls, which will have to be fattened up--in some cases, quickly--as the economy improves.

"When you have high peaks in jobless claims, you have sharp declines in claims," says Brusca.

More broadly, economists also point to a number of economic factors that bode well, despite lingering concerns about he credit crunch.

“Cyclical forces trump secular forces,” says Brusca, referring to the massive de-leveraging by both consumers and business. “This is especially true when authorities have stepped in to stabilize it,” after a shocking event like Lehman.

“We have massive monetary and fiscal stimulus in the pipeline,” says Macroeconomic Advisers President Chris Vavares.

CNBC.com

Federal Reserve Bank officials stated that they plan on buying billions of dollars worth of mortgage backed securities in the coming months.  This has cause a substantial dip in interest rates for today.  The market is already pricing in the purchases that will be made by the Federal Reserve Bank.  Check out the rate sheet on this website for current interest rates.

The conventional wisdom continues to recommend that buyers let their interest rate float if their scheduled closing is as far out as 90 days or longer. 

We at the Red Rock Mortgage/Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

If you have a mortgage question, please email us at dpharp@okfundinggroup.com. 

Mortgage rates continue to inch higher after President Obama’s announced plan to help the millions of homebuyers that are at risk of facing foreclosure. Although there might be a small refinance boom out of this, mortgage rates are moving higher mainly because those holding mortgage backed securities do not like the plan. If investors hold those mortgage backed securities, and the loans that make up those securities begin to get modified by the lenders, then the investors holding those securities do not know what the return is on their investment. Rest assured, the return on the investment will be less that it would have been. Institutions and other investors holding mortgage backed securities should be very nervous right now. That nervousness translates into sell-offs of mortgage backed securities, pushing mortgage rates higher.

This morning’s economic data was a mixed bag. The Producer Price Index (PPI) showed a jump in inflation last month, but the markets seemed to shrug it off. Even though new unemployment claims dropped last week, continuing unemployment claims are reaching all-time record levels, meaning people can’t find jobs. Analysts are predicting that we will not see an economic turnaround until late 2010.

House Resolution 600, filed last week, could revitalize a portion of the nation's housing market.  That is the claim of those that favor the reinstatement of the so called seller funded down payment assistance (DPA) programs. 

The programs in question allow the seller of a property to "donate" an amount that is equal, in many instances, to the FHA mandatory amount required for buyers to invest in the purchase transactions.  These funds are "donated" to a nonprofit down payment assistance firm.  In turn, the DPA firm awards the buyer in the transaction a gift.  This gift is usually the minimum down payment amount required by FHA of the buyers in the transaction.  In a sense, the seller of the property is giving a gift to the buyers in the amount of the required down payment, but it is one step removed by introducing a "disinterested third party" that will remove a small amount for their fee, and funnel the rest to the buyer in the form of a gift.

Although many find that this process looks "shady", it does provide assistance to those buyers that have a positive credit profile, but lack the needed FHA minimum required investment.  In addition, the required FHA minimum investment has increased from 3% total investment to a 3.5% minimum down payment.  This change creates a situation that makes it even harder for many potential home buyers to find the funds needed for an FHA purchase.

The House resolution will, more than likely, place restrictions on what kind of potential home buyer may utilize the seller funded DPA programs.  The main restriction will probably be in the form of minimum acceptable credit scores.  This should reduce the issue of defaulted FHA mortgage loans.  Credit requirements could tighten as the FHA sees fit after the program's reinstatement, assuming the resolution passes.

The conventional wisdom continues to recommend that buyers let their interest rate float if their scheduled closing is as far out as 90 days or longer. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Mortgage interest rates continue to worsen, and it really has nothing to do with any economic data that has been released in the last week. It looks as though we are facing yet another banking crisis. This secondary crisis has a little less to do with mortgage defaults, but does consist of automobile loans and credit card accounts as well. This issue, just like late last year, causes lending institutions to cease lending money. This in turn is hitting mortgage lending again, and causing mortgage interest rates to increase in the face of a deteriorating economy. This will produce a magnified negative impact on not only our domestic economy, but the global economy as well, just as it did in the 4^th quarter of 2008. The Obama Administration has already begun to address this issue by asking Congress to release more of the $700 billion set aside for the banking industry last year that was initiated by the Bush Administration.

Yesterday, banking stocks took a pounding from investors looking to cut their losses and sell, as opposed to dealing with another crisis within the banking institutions.

The question remains that what is going to happen to mortgage rates next week when all the economic data is released showing, once again, that out economy is stumbling.  Will mortgage interest rates respond in the traditional manner?

The conventional wisdom continues to recommend that buyers lock their interest rate if their closing is set to occur in the next 20 days and let their interest rate float if their scheduled closing is outside that 20 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

This morning's mortgage interest rates remain at last week's elevated levels, as little economic data is scheduled for release this week.  The only economic data for the markets to digest this week will be the weekly report on unemployment claims and housing starts for December.  Both of these should have little impact on mortgage rates.

In addition to a tremendous amount of economic data scheduled for release next week the Federal Open Market Committee (FOMC) meets next week.  I am not expecting them to cut short term key interest rates at this time, but that could change between now and next Wednesday.

The conventional wisdom continues to recommend that buyers lock their interest rate if their closing is set to occur in the next 20 days and let their interest rate float if their scheduled closing is outside that 20 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

As mortgage interest rates begin to inch even lower, this week's economic data could kick those rates even significantly lower.  Wednesday morning the report on retail sales for December will be released.  If sales were as bad as some experts think, this could lead to lower mortgage rates by mid-day.

If you have been entertaining the idea of refinancing your current mortgage, now is the time to take the necessary steps to make sure you get the lowest mortgage interest rate possible.  That would include...

1.  Speaking with a mortgage professional about what options are available to you.

2.  Filling out a loan application.

3.  Providing the needed loan documents to a mortgage professional.

These three easy steps will make it possible for your mortgage professional to lock in your interest rates at the best possible time for you.

The conventional wisdom continues to recommend that buyers lock their interest rate if their closing is set to occur in the next 20 days and let their interest rate float if their scheduled closing is outside that 20 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Mortgage interest rates have been moving lower partly because of The Federal Reserve Bank buying mortgage backed securities, and lowering interest rates across the board.  Conventional and FHA mortgage rates have been tipping lower:

It is possible that the above referenced mortgage rates could move even lower on Friday after the release of the employment report for December set to be released by the Department of Labor.  It is expected that the economy eliminated 450,000 jobs last month.  If the actual number is considerably higher than that, mortgage rates could drop significantly.  Some unofficial estimates put the number at close to 700,000 in lost jobs last month.

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 20 days and let their interest rate float if their scheduled closing is outside that 20 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Mortgage interest rates are moving lower with light trading volume in the markets through the end of the year, but January cranks up quickly with the monthly jobs report, due on January 9th.  30 year fixed conventional rates are almost 1/2 percentage point lower this morning, and FHA rates are dropping too.

Issues are still rattling the financial markets, even after the $700 billion rescue package from the Federal Reserve Bank and the Treasury Department.  The process of unfreezing the markets, as I have said in the past, takes time.  The first quarter should show us some improvement in this area.

The conventional wisdom continues to recommend that buyers lock their interest rate if their closing is set to occur in the next 60 days and let their interest rate float if their scheduled closing is outside that 60 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Although this will be a short week for the markets, there will be a large amount of important economic data released up to Christmas Day.  Home Sales, Consumer Sentiment, and Gross Domestic Product will impact mortgage interest rates this week.  Trading volumes should be light this week in the financial markets, but that could lend itself to greater volatility.  In turn, we could see some wild swings in mortgage rates this week.  It looks like rates might settle down a little after the holidays.

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 60 days and let their interest rate float if their scheduled closing is outside that 60 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Mortgage interest rates dropped significantly yesterday after The Federal Reserve Bank dropped key interest rates and released a market friendly policy statement.  The statement essentially stated that The Fed will do whatever is necessary to see that the markets operate correctly and that the economy moves toward recovery.

This afternoon, mortgage rates have moved higher after the major stock market indices have moved into positive territory.

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 7 days and let their interest rate float if their scheduled closing is outside that 7 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

This morning, the markets and the public were given some dismal news.  530,000 jobs were lost in November.  That is the worst job loss in 34 years!  In addition, October's loss of 240,000 jobs was updated to a loss of 320,000 jobs!  In the last two months, the U.S. economy has shed 850,000 jobs, and next month when they revise the November number, it will likely be even more than 530,000.

The unemployment rate jumped to 6.7%.  That number would have been worse if it were not for those workers that have removed themselves from the job hunting process.  That means they are either taking some time off, or going back to finish college.  Whatever the reason, they do not get counted in the unemployment rate.  That number should be higher than 6.7%.

The bottom line is that these ugly numbers should jolt the federal government into action.  A broad stimulus program that equates to approximately 4% of the nation's Gross Domestic Product is really what will be needed to begin with.  That comes to about $600 billion.

Interestingly enough, mortgage interest rates have remained at yesterday's levels for most of the morning, and are now beginning to worsen.  That is odd considering the economic news delivered this morning.  It is possible that the data actually has had the opposite impact on the markets because it was SO BAD.

The conventional wisdom continues to recommend that buyers lock their interest rate if their closing is set to occur in the next 90 days and let their interest rate float if their scheduled closing is outside that 90 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Mortgage interest rates are sliding lower today in response to remarks made by Federal Reserve Chairman Ben Bernanke.  He suggested that The Fed will need to do more in order to help the stumbling economy.  In addition, factory Orders for October dropped by over 5%.  That is a full percentage point more than what economists had estimated, as if we needed more evidence that our economy is in trouble.

The number one issue facing the mortgage interest rate market is volatility.  It is becoming tougher to get a handle on what will happen in the next 30 to 90 days.  This is problematic for those who are attempting to decide whether to lock or float the interest rate.

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 90 days and let their interest rate float if their scheduled closing is outside that 90 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Another new plan announced by the Treasury Department in conjunction with The Federal Reserve Bank caused mortgage rates to drop last week.  The Treasury Department and The Federal Reserve Bank will be purchasing up to $800 billion in mortgage backed securities.  Mortgage interest rates immediately began to drop.  The chart below shows how mortgage rates dropped in the last week of November:

It was common knowledge that mortgage rates have been artificially high over the last couple of months.  The global financial crisis caused the mortgage interest rates to spike.  The announced program will inject some much needed liquidity into the market. 

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 60 days and let their interest rate float if their scheduled closing is outside that 60 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Mortgage rates are inching slightly higher to start the week, which will be shortened due to the Thanksgiving holiday.  This morning, the existing home sales report for October was released.  It would seem that there is still quite an over supply of homes nationwide.  Oklahoma's supply is less than the national average.

The housing market in Oklahoma is still quite strong...

On Tuesday November 25, the Oklahoma Mortgage Bankers Association (OMBA) is holding a press conference to spread the GOOD NEWS of what is happening in America’s heartland and specifically the state of Oklahoma that people are still buying houses and still have several options for financing the homes they want to buy. Along with OMBA President Steven Plaisance, Oklahoma City Mayor Mick Cornett, national MBA Chairman David Kittle, and many other housing leaders we will be spreading the word that people in our part of the country are not losing their homes or their investments in them.

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 7 days and let their interest rate float if their scheduled closing is outside that 7 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

The Consumer Price Index (CPI) report was released this morning, and it was quite surprising!  It showed that prices at the retail level dropped at a level not seen in over 60 years.  Economists were quick to explain that the unprecedented drop in energy prices led the price declines.  Nonetheless, there are whispers about the possibility of a deflationary economy.  This can be just as bad as inflation, but at opposite ends of the economic spectrum.  Deflation hit the U.S. economy especially hard during the Great Depression.  Deflation works like this:

If you want to buy a new dishwasher at a price of $225.00, but you are sure that the price will only be $190.00 next month you will postpone buying that dishwasher until next month.  Next month comes and that same dishwasher is now $195.00.  That's a good price, but you are sure that if you wait just one more month the price will be $175.00.  Again, you postpone your purchase until next month.  Now imagine that 100 million consumers across all retail sectors do that exact same thing.  At that point, the economy grinds to a complete halt.  We are seeing this, to some extent, in the automobile sector but for a different reason.

The recession, usually will push mortgage interest rates lower.  This is not currently happening.  The still present credit market crisis is having an adverse impact on mortgage interest rates across the board.  A standard conventional mortgage rate should be around 5.75%, but those rates are actually about 1/2 percentage point higher.  As the credit markets begin to "unfreeze" rates should begin to move lower.

The conventional wisdom continues to recommend locking your interest rate if your transaction is scheduled to close within 20 days, and float your interest rate if your transaction is scheduled to close outside that 20 day window.  We at the Oklahoma Funding Group feel that if you are happy with your interest rate, you should lock it as soon as possible.

If you have a mortgage question, please email us at dpharp@okfundinggroup.com. 

The Stock markets dipped and then rallied on Thursday.  When the dust settled, the Dow Jones Industrial Average picked up over 500 points!

Today is another story.  With Retail sales for last month hitting an all time low, the stock markets are down, but mortgage rates are dropping a little today too.  This just demonstrates that the economy is taking center stage for the next week or two, or until the next "crisis" hits.

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 20 days and let their interest rate float if their scheduled closing is outside that 20 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Now that the Presidential election is over and we know who will be our next President, The markets and economy can once again take front and center.

More economic data today indicates that the U.S. economy is ill.  The good news is that nobody is discussing the prospect of a true depression, but the conventional wisdom is betting that the economy has slipped into recession.  Since the credit markets are beginning to loosen up it looks as though mortgage interest rates are reacting to the slowing economy in a more traditional fashion.  This should translate into lower mortgage rates in the near future.

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 7 days and let their interest rate float if their scheduled closing is outside that 7 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

After 3 straight days of dropping mortgage interest rates, they are moving slightly higher today.  Even with higher than expected unemployment claims, rates have pushed higher.  Look for mortgage interest rates to respond to economic reports showing that we are facing a global economic recession.  next week will present several reports about the economy.

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 20 days and let their interest rate float if their scheduled closing is outside that 20 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Finally!  It looks like there are some promising signs for the frozen credit markets.  Interbank lending rates are dropping, and mortgage interest rates are dropping as well.  Yesterday, conventional mortgage rates dropped by 1/4 of a percentage point, and FHA rates dropped by 1/2 of a percentage point! 

The conventional wisdom now recommends that buyers lock their interest rate if their closing is set to occur in the next 7 days and let their interest rate float if their scheduled closing is outside that 7 day window. 

We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

Since The Treasury Department has yet to have really set up a process for helping lender unload their bad mortgage debt, investors do not seem too interested in funneling anymore money into the mortgage bond markets.  In addition, a tremendous rebound in the stock markets yesterday drove mortgage bond prices down.  With last week's crisis in confidence in markets across the board and this week's issues, mortgage interest rates have risen, in some cases, a full percentage point!  That means that a mortgage you might have been able to get last week at 6% is now closer to 7% this week!  This trend should begin to reverse itself, but there is no telling when right now.

The conventional wisdom is now recommending that buyers allow their interest rate to float even if the closing is more than 90 days out.  We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

If you have a mortgage question please email us at information@okfundinggroup.com . We will answer your question as quickly as possible.

This week the stock market fell to the lowest level since 2003. Normally mortgage markets improve during a stock market decline, since Fannie Mae, Freddie Mac, and Ginnie Mae mortgage backed securities (the vehicles through which most mortgages made today are sold) are considered a relatively safe haven. This week, however, the prices paid for these securities moved lower as well. One reason is that some investment funds have been forced to reduce their leverage and sell nearly every asset class in their portfolios. Another factor is investor concern that the supply of debt will increase significantly as the government funds its rescue actions. Mortgage rates ended the week moderately higher.

Investors viewed the $700 billion rescue plan passed last week as a necessary first step, but not an immediate solution to the credit crisis. Governments around the world took a variety of additional steps during the week to support the banking system. A historic coordinated interest rate cut from many central banks took place on Wednesday. The Federal Reserve lowered the Fed Funds rate by one half point to 1.50%, citing reduced inflationary pressures due to an economic slowdown and falling energy prices. The Fed Funds rate heavily influences short-term interest rates, but its impact on long-term mortgage rates varies based on inflation expectations. In this case, the Fed rate cut most likely helped move mortgage rates a little lower, but the factors described above had more influence.

The decline in home prices was a major cause of the credit crisis, and stabilization in the housing market will be important to resolve the problems. Little noticed this week, August Pending Home Sales jumped 7% from July, far above the consensus for a small decline. They were 9% higher than one year ago and were at the highest level since June 2007. Pending Home Sales are a leading indicator for the housing market, meaning that the next Existing and New Home Sales reports may show increases. Investors will be closely watching future housing market data to see if the trend continues.

The conventional wisdom continues to recommend that buyers lock their interest rate if their closing is set to occur in the next 21 days and let their interest rate float if their scheduled closing is outside that 21 day window.  We at the Oklahoma Funding Group feel if you are happy with your interest rate you should always lock it in as soon as possible.

If you have a mortgage question please email us at information@okfundinggroup.com . We will answer your question as quickly as possible.