No More Purchases...Mortgage Market Update

In big news this week, the Fed said that there won't be any additional Mortgage Backed Securities purchase on top of what they've committed to buy. Instead, they'll slow down on the purchase and extend it through the first quarter of 2010 in order to provide a smooth transaction back to normal market conditions. It's important to remember that once the Fed stops purchasing Mortgage Backed Securities interest rates will start climbing. It also means that they'll be purchasing lower quantities since the remaining will be spread over a long period of time. Needless to say...we could see some home loan rates increase in the near term.

Existing Home Sales and New Home Sales reports came lower than expected but continue to show that the housing market seems to be getting a little better. Inventory of unsold existing and new homes went down. In the case of new homes it is partially because we haven't seen as many constructions as before.

Stocks struggled this past week and one of the reasons being concerns of Iran's nuclear sites construction. Stocks and Bonds could suffer some more if the situation escalates. There's a meeting scheduled for Thursday where members of six nations will discuss the situation further.

Durable Goods Orders fell in August and adding stocks struggles to that, the Bond market did well and we saw some improvements on interest rates.

Looking Forward...

The biggest report coming out this week is the Jobs Report for September. It's a very important one because it can show signs of an improved economy. August report wasn't good so hopefully we'll see something a little better.

Other reports coming out this week...Consumer Confidence (Tuesday), Core Personal Consumption Expenditure (PCE) Index (Thursday) - Fed's favorite measure of inflation, and the Jobless Claims report just before the Job Report on Friday.

Remember...Weak economic news causes moneys to flow from Stocks to Bonds, helping home loan interest rates. Strong news has the opposite effect.

To Your Success ~

Maria