Nashville Mortgage Rates Update – 07/06/11

Nashville Mortgage Rates

It was choppy today, but in the end there wasn’t much change in the rate markets.  The stock market traded better most of the afternoon, and in turn kept interest rates from improving much.  The June employment data on Friday prevented both markets from too much change today.

Tomorrow at 8:15 EST it starts with the ADP non-farm private jobs report for June, which is expected up 60k.  ADP and the BLS data on Friday have demonstrated two different worlds at times, but whatever ADP comes out with could change the outlook for Friday’s bigger report.  Then at 8:30 weekly jobless claims are expected down 8k to 420k; still unable to move below 400k, which has been the case for 14 weeks now.  The claims data tomorrow, whatever it is, is not data included in the June employment report.

China increased its base lending rate today to 6.5% in efforts to cool off its over-heated economy.  Tomorrow the ECB (European Central Bank) is expected to increase its base rate to slow inflation that has been increasing.  Meanwhile, U.S. rates continue to be some of the lowest globally.

What can Congress to do help economic recovery?  It should certainly include plans to back off the restrictions that Barney Frank (Dodd-Frank legislation) set in motion.  Bloomberg News today: ” Nine of out 10 mortgages bought by Fannie Mae in the first quarter were held by borrowers with credit scores higher than 700, according to regulatory filings.  In 2003, the share was 68%.  Credit scores, developed by Fair Isaac Corp., range from 300 to 850.  Fannie Mae and Freddie Mac, seized by the U.S. during the closing months of the Bush Administration in 2008, have tightened more than a dozen mortgage qualifications since then, including those for down payments and credit scores.  The restrictions come after the government handed out $16.2 billion in homebuyer tax credits to pump up demand and the Federal Reserve bought more than $1 trillion of mortgage bonds to lower borrowing costs.  Lending for mortgages to buy homes probably will drop to $432 billion this year from $473 billion in 2010, according to a forecast last month by the Mortgage Bankers Association in Washington.  In January, the trade group predicted a rise to $616 billion, which would have been the first increase since 2005.  The association now forecasts the gain will be in 2012.”

Administration spokesman Gene Sperling on CNBC this afternoon was defending the use of 30 million barrels of oil from the SPR; only in Washington can someone stand in front of TV cameras and blather on as if what is coming out has fact associated with it.  Sperling defended the use of the reserve and said it actually helped the economy out of its rough patch!  Within days of the announcement to use the oil, oil prices rose and are now $4 higher/barrel than when the 6 hours’ worth of oil was released.  With mis-information like this, it is no wonder the U.S. economy is faltering, the housing sector remains in depression after 3 years, and the U.S. budget deficit is increasing by $1.5 trillion a year for the last three years.