It appears we are on the threshold of new loan limits - if the stimulas package gets to and is signed into law by President Bush - then the new conforming loan limit will be around $730,000. This is of course great news for homeowners in our area, especially if there are not "hits" to rate for these new loan limits. Stay tuned...
On the rate front - what an incredible season we are in economically - we have really seen the impact from the global markets impacting federal treasury rates/bond rates and thus indirectly mortgage rates. Generally, you can follow the 10 year bond and get a good idea of what is happening to mortgage rates and yet what in interesting season we are in - as an example = immediately after the emergency 75 basis point reduction in the federal funds rate we saw the 10 year at 3.25 - and today after an additional 50 basis point reduction and the anticipation of further fed cuts we see the 10 year at 3.70 - and thus mortgage rates are actually higher today than they were for a few hours on the day of the emergency rate cut. So what gives - I am not an economist, but it comes down to supply and demand for the 10 year and the fears of what the long term implications of these rate cuts will be on the economy.
Bottom line - rates are still incredibly low and there appears to be good news on the horizon - maybe the problem is that they are not as low as we had hoped.
Rich
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