Posts Tagged ‘unemployment’

The Department of Housing and Urban Development or HUD has launched a new program to help with job creation through a series of grants. Armed with 150 million dollars provided by Congress the entity that is overseeing the project is the Office of Sustainable Housing and Communities or OHSC. According to HUD, W-2 employed households are still feeling financially pressured. According the Department of Labor, January saw the first unemployment decline in over a year to 9.7%. While it is a decrease we are still close to the historic highs. In addition, HUD has determined that the average household spends half of its monthly wage on housing and transportation. What this all means is the OSHC has been set up to help the average homeowner. The new office will provide grants to metropolitan planning organizations, state governments and non-profit organizations to improve access to affordable housing. It will also invest in energy efficient homes and buildings and put emphasis on energy efficient retrofitting for new home purchases. What does all of this mean? It means that President Obama is trying to make good on his promise to improve our economy through housing subsidies. Whether this plan will have any significant impact to the average home owner remains to be seen.

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Mortgage rates remained constant for the third week in a row. These low interest rates have been holding steady for the last three months. At the Federal Reserve’s policy meeting that was held on September 23rd, Chairman Bernanke told the media of the Feds plan to hold its benchmark interest rate “exceptionally low for an extended period”. The 30 year conforming interest rate is around 5.25% APR. FHA 30 year rates are not that far behind with rates around 5.625% APR. This means that the Fed is committed to doing its part to see our economy pull out of this recession. President Obama has said earlier that he expects unemployment to rise from the August rate of 9.7% until the end of the year, but during the first quarter of 2010 our country should start to see unemployment hold steady and start to reverse its course. I hope they are right.


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After a turbulent week we closed with interest rates climbing a little. This was due to better than expected economic news and the fact that Fed Chairman Bernanke stating that the economy was close to a recovery. That sent the stock market up and the bond market down. This ultimately raised mortgage rates. I believe that this was nothing but smoke and mirrors with the national unemployment rate rising to 9.5% unemployment rate rose to 11.2% in California and over 12% in Nevada. These numbers have not been seen since the early 80’s. The reason for my disappointment is this. If mortgage rates continue to climb and we see FHA rates climb to 6% it will halt approximately half of the loans currently in process. The reason for this is they will no longer qualify. My belief is that today was just another dip on the current rollercoaster ride that has become the FNMA 30 year mortgage bond market. Til next week.

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The FNMA 30 year mortgage bond continued its weekly roller coaster ride this week and went from good to bad as the week progressed. Friday saw the worst prices of the week which increased rates substantially from Monday’s opening. The reason for the increase in interest rates was a surprising decrease in unemployment claims. This is just another turn in an already crazy market. I fully expect interest rates to recover and go back down in the next few weeks. In fact it will probably happen earlier if the current roller coaster ride continues. Just an FYI, FHA interest rates traditionally don’t adjust as quickly as Conventional rates. So if you are looking to lock in a FHA interest rate with your lender you may notice that your rate has not moved much this week.

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