Mortgage Interest Rates Test Definite Strong Level of Support

May 19, 2009

Daily Mortgage Updates

A&N Mortgage Logo19 May 2009 – We are recommending that you cautiously float as mortgage interest rates test a definite strong level of support. Today, housing starts were reported significantly lower than expected, down 12.8% to 458,000 units from the expected level of 520,000! This is the lowest number of housing starts since January 1959, over 50 years ago. While the number is significantly lower than expected, it can actually benefit us in that it will give us an opportunity to deplete some of the existing inventory. On another note, three month LIBOR fell to 0.75%, down from a high of 4.81% back in October 2008. This can definitely be seen as a reflection of increased liquidity in the financial sector. We’ve also seen banks like JP Morgan, Morgan Stanley, and Goldman Sachs have recently applied to repay approximately $45 billion in TARP funds. All of these indicators point to perhaps a long-awaited turn in our economic forecasts. So for now we recommend a floating position.

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About Alicia Hyland

Alicia has over 20 years experience in the financial sector including tax, accounting, financial analysis and mortgage loan origination. She enjoys working with new housing developments and first time home buyers. She subscribes to several financial services such as Mortgage Market Guide, My Loan Biz, Wall Street Online to name a few to stay current on matters affecting the housing industry.

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