News You Can Use from Gary Moore

Weekend Market Update

Dec. 5-6, 2009

While FHA loans have driven the purchase markets this year due to their relatively low downpayment requirements and the disappearance of low-doc and low-investment conventional loan programs, the party may slow down next year as buyers will be required to have more money and better credit, HUD’s top man told Congress this week.

In financial markets, concerns about future interest rate increases hit bond prices and kept a lid on stocks on Friday.

Employers cut 11,000 jobs from their payrolls last month, the Labor Department reported Friday. It was the smallest number of job losses since the start of the recession in December 2007. The unemployment rate, generated by a separate survey, fell to 10% from a 26-year high of 10.2% in October.

The 10-year U.S. Treasury note rose in yield to 3.48%.

Job losses from the previous two months were revised lower, too, indicating that a slow but steady pattern of lessening job cuts is emerging. Stocks initially jumped on the news and hit 14-month highs---touching levels last seen after the collapse of Lehman Brothers last year--- before pulling back and taking modest gains into the weekend. Some market players began tilting toward the prospect of future interest rate increases, if the economy has indeed bottomed.

As we noted last week, short-term unemployment numbers mask the depth of U.S. unemployment as those persons who have been unemployed for more than six months is at all-time highs. The drop in the unemployment rate also points to the millions of people who have been out of work so long that they've given up looking for a job.

Reminding us that all markets are inter-related, the dollar showed strength against the yen and euro, which made dollar-denominated oil prices rise and led to a drop in gold prices. Much trading action was an unwinding of the carry trade, which involves investors borrowing in low-yielding currencies and then lending money in higher-yielding currencies.

HUD Secretary Shaun Donovan testified before the House Committee on Financial Services on Wednesday that FHA will be raising requirements for credit score and will raise its mortgage insurance fees next year. Donovan also said that in a risk-hedging measure it will lower the amount of buyer’s closing costs that a seller may pay on an FHA loan from the current 6% to 3% of the sales price.

Donovan also noted that this year first-time buyers have consumed 75% of all FHA purchase loans, and that half of all first-time buyers have used FHA loans. With the Recovery Act credit of up to $8,000 for first-time buyers and up to $6,500 for move-up buyers good through April 30, prospective buyers need to take action.

Call or email me to get pre-approved and get my free, customized buying strategy consultation.

30-Year Conventional Fixed

4.75% $100,000-$417,000


FHA-100% VA

5% $100,000-$393,300


100% Guaranteed Rural Housing w/no MI

5.5% $100,000-$417,000

30-Year Jumbo 5/1 ARM (15% down, No MI)

5% $417,001-$900,000

(Interest-only available-Call me)

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Cell: 615-579-8658 Toll-free fax: 866-321-6513

"Confidence grows at the rate a coconut tree grows. It falls at the rate a coconut falls." - Montek Ahluwalia

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http://www.RealCarte.com

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http://www.BrentwoodHomeLoan.com

(0% points, 1% origination, subject to program and lock period. Market Update informs on market trends and is not a quote for a unique borrower.)