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Weekend Market Update

May 29-30, 2010

Jumbo loan borrowers who got accustomed to seeing rates in the 8’s and 7’s over the past few years should take a look at my Jumbo rates below. A fixed-rate Jumbo in the mid-5’s can open up buying opportunities for this relatively difficult borrowing niche. Realtors, call me to work up scenarios for your Jumbo listings.

The stampede of money out of stocks and into Treasuries and mortgage-backeds slammed on the brakes Thursday before returning to the near-term trend on Friday. The Dow Jones Industrial Average dropped 122 points on Friday and closed at 10,136, which represented a decline of 7.92% for the month, making it the worst May percentage performance since 1940. Its 871.98 drop in aggregate points was the largest May point drop in history.

The 10-year U.S. Treasury touched a low yield of 3.1% this week before ending at a yield of 3.3% at Friday’s close. Technical resistance thus held and remained established just below 3.3% and just above 3.1%. That range was last touched with a sharp down spike pattern like this one---but was not penetrated---on Oct. 7 and Dec. 1, 2009.

That technical reading tells us we have re-visited the bottom and cannot expect rates to move lower from here. If that level is pierced on the down side for the 10-year Treasury, however, on heavy trading volume, a new down leg in rates could be signaled. Price and rate move in opposite directions in trading bonds and Treasuries---when bonds are being bought, the price goes up and the rate goes down, and vice versa.

Markets this month have been responding to bad news, such as the European debt crisis.  A bad day for stocks is often a good day for mortgage rates.  Mortgage rate pricing was slightly higher week-over-week after also recently touching lows of the year. Mortgage rates loosely correlate with Treasuries.

Mortgage rates remain in a channel of historic lows, but this opportunity will be meaningless unless buyers and borrowers commit to taking action. Call me for a free pre-approval and loan strategy for would-be buyers, and call me for a free refinance checkup to confirm whether you can improve your situation with a new refinance.

30-Year Conventional Fixed

4.75% $100,000-$417,000


FHA-100% VA

4.75% $100,000-$393,300


30-Year Jumbo Fixed

5.5% $417,001-$900,000

(Interest-only available-Call me)

THDA Great Start

5.35% $100,000-$393,300

4% of sales price Gift

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

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

“Collective fear stimulates herd instinct, and tends to produce ferocity toward those who are not regarded as members of the herd.” – Bertrand Russell

Visit my real estate website:

http://www.RealCarte.com

Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination. Market Update informs consumers and Realtors on market trends, offers subjective opinions and is not a quote for a unique borrower.)