San Francisco Real Estate - Residential

Mortgage Weekly Update - Last Week in Review

Foster Weeks publishes a weekly mortgage report which is updated every Monday morning. How is this affecting the San Francisco real estate market? Read our weekly and monthly market reports. Here’s what Mr. Weeks says about last week’s activity:

“I’M FREE…FREE FALLIN’.” Tom Petty. And a free fall indeed was the case last Wednesday, as Bonds had their worst one-day performance since last October, losing an astounding 206bp. So what caused this free fall…and what helped Bonds and home loan rates rally back and improve later in the week? Here’s what you need to know.

The main culprit for Wednesday’s sell off was supply. The Treasury auctions and the increased number of refinance transactions closing have added hundreds of Billions of dollars of new Bond supply to the market. Economics 101 tells us that anytime supply vastly exceeds demand, prices will move lower, and that’s exactly what we saw last week…and as Bond prices move lower, home loan rates move higher. And the trend isn’t likely to end anytime soon, as the Treasury will have to continue to pump out major supply of Bonds, in order to pay for the massive government stimulus plans…and the Fed buying plan simply won’t be enough to balance out supply and demand - it’s like trying to sop up a flood with a sponge. Bottom line - rates are likely on the rise, but still near historic lows. Let’s talk and make sure you have taken necessary actions for your own financial situation.

Read the entire report on our website.

posted by SFResidence.com @ 11:02 AM