Long Beach California Real Estate Loans

Long Beach, Ca.  While there were over 200,000 free meals given away yesterday as a promotion for Dennys, it was an ugly day for rates, which is unfortunate because it seems that the slightest positive news about the economy makes rates go higher, whereas currently they don't seem to be heading down on any news. According to the National Association of Realtors, U.S. Pending Home Re-sales were up 6.3%, the first increase since August. However, rates worsened with all of the supply worries that exist - 10-yr and 30-yr Treasury securities headed down (rates went higher) after the U.S. Treasury said yesterday that it will borrow $493 billion this quarter, 34% more than it initially projected. The U.S. will announce plans today to sell and estimated $69 billion in notes and bonds at three auctions next week. With all of this in mind, the 10-yr is up to 2.88% and 30 year fixed mortgage prices are worse by .125-.250.

As soon as the California State Legislation comes to some budget agreement perhaps the Cal HFA program can come back on line as well.  The 4% home loan solution offered by Republicans seems to be gathering speed and appears likely to happen.   Lastly if you are a car dealer, Christmas will arrive early with an incentive to buy a new car where the buyer will get to deduct the sales tax and interest on a loan if they buy before year end.   I like it.  Buy a new home with a 4% rate  and a new car, to help the economy.  Let's hope the consumer buys the house first. 

Some good news is being reported today, U.S. service industries contracted in January at a slower pace than forecast as the slump in orders moderated, even as employment sank further. The Institute for Supply Management's index of non- manufacturing businesses, which make up almost 90 percent of the economy, rose to 42.9 from 40.1 in December. Readings below 50 signal contraction. Other reports today showed the labor market deteriorated further last month. "We haven't hit our stride in any semblance of a rebound, but at least the declines aren't as bad," said Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, who had forecast a rise to 41. "The decline is decelerating. You have to stem the tide before you can reverse it."

The bad news is if you are senior executive with financial institutions that have taken TARP money.  In that case your compensation level is capped at $500,000 until the President says he has changed the mind.  If you care to read about all the limitations here is a link on CNBC.  http://www.cnbc.com/id/29014776   Not sure what is next, but when the government starts telling you there is a limits on what you can earn, where does that end? 

A move by the U.S. government and the Obama administration to reduce borrowing costs could face challenges, as Bankrate.com data shows the 30-year fixed mortgage rate has risen to 5.34 percent from a low of 4.875 percent in early January, when the Federal Reserve agreed to purchase $500 billion in mortgage bonds by June. Mortgage interest has climbed because more borrowers refinanced when rates fell and boosted the supply of mortgage bonds; but experts also attribute rising rates to expanded borrowing by the government to pay for stimulus packages, worries about Fannie Mae and Freddie Mac and concerns about whether the central bank will continue to purchase mortgage bonds after June.   This has backed up our rates as we have to attract buyers to pay for our added debt.   But the 4% home loan rate idea will be the ticket for a while.  Then we suspect you will see rates back up because the rest of the world is going to want a higher rate of return if they are going to buy our debt.

Kirk Mulhearn, a Long Beach Real Estate Broker and Professional Mortgage Planner, can be reached at 562-989-4608  ext. 110 

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