New home sales plummet in May

Federal Tax Credits came to an end April 30th. Part of the fallout - new home sales plummeted a whopping 32.7 percent from April according to the Commerce Department.

The annualized sales rate of 300,000 homes is the lowest since the Commerce Dept starting tracking data in 1963.

The Mortgage Bankers Association indicates a lack of buyers - actually 6% less than the previous week.

Loan modificatins made payments more affordable allowing them to pay their mortgage payments on time.

The Associatin of Home Builders beieves the improving economy will be a strong incentive for home buyers to return to the market. Let's watch the June numbers.

Where are Mortgage Rates now??

by Nan Woodward

Home mortgage rates fell last week. Long term rates are at the lowest they've been in five weeks according to Freddie Mac.

You can get a thirty year mortgage rate below 5%. Fifteen year fixed rate mortgages averaged 4.36%. Now you need to read your quote, there is a paydown to obtain these wonderful rates but that is low also today.

Since this is coming now when home rates are lower, you have a win win situation. Mortgage applications are currently at a low - lower than they have been in nine years according to the Mortgage Bankers Assoc.

So now is the time to buy and the time to get a great mortgage rate.

Fed: Recession Ending, Rates Left Alone

The Federal Reserve ended its policy-making meeting Wednesday with the declaration that the recession is ending and it would move toward more normal policies.

The Fed said, “Economic activity is leveling out.” It added that it expected inflation would remain “subdued for some time.”

The Fed said it will keep the short-term key interest rate near zero, but it will end its program to buy $300 billion worth of Treasury bonds by the end of October. Buying bonds was one of the Fed’s efforts to drive down the cost of home mortgages.

“In a way, it’s more of a thumbs-up than if they had said they were continuing the Treasury-buying,” said Edward McKelvey, an economist at Goldman Sachs. “They’re saying that things are going according to plan, and that the policy is O.K.”

Source: The New York Times, Edmund L. Andrews (08/12/2009)