We have a bank holiday today, but we are all in the office working hard. Interest in mortgage refinance is booming. Over the past week, rates have reached record lows for the 30-year fixed (3.94 percent on average) and the 15-year fixed (3.29 percent on average). These rates have caused an increase in refinance activity, but we are still running into the same availability problems. With declining equity in homes and tightened credit standards, many individuals are finding themselves shut out of better rates. Many analysts see the refinance activity and suggest that it is being driven from the same pool of qualified individuals.
Furthermore, individuals that do qualify for purchase or refinance loans are having a hard time getting the lowest rate available. The “mortgage rate spread” – the spread of the rate you get against the available national average, is actually widening. In other words, despite an average of 3.94 percent offered on the 30-year fixed, individuals are having a hard time meeting the criteria necessary for getting the lowest rates, and often simply qualify for the same type of rate they would have four or five months ago. Make sure you have an in-depth conversation with your loan officer to discover your options. Give us a call for a free (and easy) consultation… 805.543.5626.
The employment picture (or lack thereof) remains grim. Nearly one-third (4.5 million) of the unemployed have been out of work for over a year now. Companies did add 103,000 jobs in September, but unemployment remains at 9.1 percent. The unemployment rate has hovered over 9 percent for over two years now. President Barack Obama described the state of the economy as “an emergency” in a speech last Thursday and pushed for passage of his jobs bill.
Look for the September retail sales report and the August trade balance report to be released later this week.