November 11, 2009
November 11, 2009 by admin
November has started with another solid run by the DOW. The stock market passed its high mark of the year today, after the third straight day of solid gains. The recent rally in the equity markets has not significantly altered fixed rate home loans. This abnormality is great news for home owners who are still exploring home refinancing as well as potential home buyers looking to close before the end of the year. The improvement in the DOW and equity markets recently does not appear to be pulling investors away from bonds as the yield on the ten year Treasury bond has held firm over the last week and closed at 3.45% on Wednesday. Long term thirty year mortgage rates are available between five and five and a quarter percent with most national mortgage lenders for thirty year loan terms and still well below five percent for shorter term financing.
To date, the markets have been relatively unharmed by the continued decline of the jobs market and the national unemployment rate hovering above ten percent for the first time in the past twenty years. This news has been shelved by investors focusing on other growth stories in the economy and an overall belief that better days are in the future. The divide between Wall Street and Main Street is continuing to grow larger, as illustrated by this weeks edition of Time Magazine. There is a growing disconnect between the middle class and the administration that has been slow to deliver job growth in many hard hit areas of the country.
The housing market has received several doses of good news this week. On Monday, a report tracking pending home sales showed a six percent increase for the month of September, likely a signal of borrowers rushing to lock in properties prior to the expiration of the first time homebuyer credit originally scheduled to end at the end of the month. The ending of the home buying tax credit has been a lightening rod for mortgage and real estate lobbyists who have argued that this credit has been instrumental in assisting over 300,000 purchases in 2009 alone. The good news is the lobbyists have done their job and Congress has agreed to extend and expand the homebuyer credit into 2010, now scheduled to end in April of 2010. The new homebuyer tax credit will also be extended to qualified existing home owners who are looking to move up and purchase new properties. Move up buyers who have lived in their existing properties for over five years are now eligible for a tax credit up to $6500 to help them purchase a new property.
The tax credits could help to finally help the housing markets turn the corner. The government programs aimed at helping home owners refinance or modify their mortgage loans through the making home affordable program have been received with mixed reviews of success at best, the same can not be said for the first time home buyer tax credit which has directly aided in bringing first time buyers back into the market and helping to rebalance the supply/demand markets of real estate.