Arlington, TX

The Bond market will gravitate towards news from the job market this week, with employment information due to arrive on Wednesday and Friday. Although Wednesday's ADP Employment Report has a history of being somewhat unreliable in predicting the "official" Jobs Report number, Bond traders will still try to use it to predict what the Department of Labor's report will show on Friday. And this week, the estimates are negative - meaning no job creations are expected, net job losses are what is anticipated - so any positive reads could be good news for Stocks, but bad news for Bonds and home loan rates. So...surprise, surprise...more volatility for Bonds and home loan rates is likely in store, between the ADP Report release on Wednesday, and the arrival of the Jobs Report on Friday morning. Please go to http://www.tombrewerjr.com/for more information.

Remembering that when Bond prices move higher, home loan rates move lower - you can see that the chart below shows some good news. The black line indicates a "floor of support" created by the Bond's 50-day Moving Average - and you can see that the floor is helping Bonds hold their present levels, and if the floor holds, could potentially help them improve even more.

While Bonds and home loan rates could react to early week news of housing and manufacturing, the employment news will definitely be the talk of the week, and any surprises will likely cause a swift reaction.

"NO GREAT DISCOVERY WAS EVER MADE WITHOUT A BOLD GUESS." Isaac Newton But even the great mind of Isaac Newton might not have guessed that Bonds and home loan rates would continue on such a volatile course. But let's get bold, and discover what caused the latest rock and roll action in the financial markets, and take a look at what the coming week might have in store.

Forces that effect Mansfield , Arlington and Fort worth Real Estate were certainly at work to keep the financial markets from being at rest, starting bright and early on Monday morning. The headlines brought a quick shot in the arm for Stocks, as beleaguered Bear Stearns is now expected to see $10 per share in their buyout, rather than the previously expected $2 per share. Great news for the troubled financial sector at large, but Bonds got battered hard, as money flowed out of Bonds and into Stocks - causing home loan rates to rise.

But as the week progressed, some dismal news played out, including a plunge in Consumer Confidence and mixed news on the housing market, which pulled the money right back out of Stocks, and into the safe haven of Bonds...helping home loan rates improve again. But like Newton's famous third law of motion, "every action has an equal and opposite reaction" - Bonds and home loan rates changed course again, on better than expected unemployment claims on Thursday. Please go to http://www.tombrewerjr.com/for more information.

Then Friday brought the discovery that Core inflation is perhaps not as hot as previously thought. The highly watched year-over-year core inflation rate was reported at just 2%, as measured by the Fed's favored Personal Consumption Expenditure Index (PCE), and within the bounds of what the Fed would like to see for core inflation. Since inflation is the arch enemy of fixed return Bonds and home loan rates...this news was good indeed, and caused home loan rates to improve once again. Once the dust settled for the week, home loan rates ended up near where they began, before their weekly roller coaster ride.

WHILE THE MARKETS REMAIN HIGHLY VOLATILE AND UNCERTAIN, AT LEAST TWO THINGS IN LIFE ARE CERTAIN - DEATH AND TAXES. BUT THIS YEAR, SOME GOOD NEWS FOR A CHANGE AT TAX TIME, WITH THE REBATE CHECKS MANY HAVE IN STORE. WANT TO BE CERTAIN ABOUT WHEN TO EXPECT YOURS...AND HOW MUCH IT MIGHT BE? DON'T MISS THIS WEEK'S MORTGAGE MARKET VIEW!

The unannounced news outta the FHA this week is that lenders are requiring 580 credit scores to do loans at 100% with the AmeriDream 3% gift from the seller. What does this translate to in the Real Estate world you ask?? Flexibility from both the buyer and the seller if you want to get the deal done.

More often than not when facing FHA financing and you will as Real Estate professionals , buyers or sellers will be dealing with this on a more common place occurrence. If the buyer wants closing costs as part of the seller concession then the seller could be looking at close to 7% off the list price to complete the transaction. What does this mean? Value of the property rules out potentially 50% of the market for the buyer. Be careful as the seller how to price the property because the real inevitability is you may need value and flexibility to sell your house in the coming year. Appraisals are becoming much less tolerant at providing the value your home is worth so the whole equation now must make sense to the buyer, seller and the lender. Please do not hesitate to go to our website at www.tombrewerjr.com for more information.

So after all that...what lies in wait as the markets reopen following the holiday weekend? Yet another action packed economic calendar. We'll get a look at the housing market via the latest numbers on both New and Existing Homes Sales, but the report voted most likely to influence the markets will be Friday's Personal Income and Spending report with its imbedded data on Core Personal Consumption Expenditures (PCE)...which just happens to be the Federal Reserve's favorite measure of consumer inflation. Please do not hesitate to go to my website for more information at http://www.tombrewerjr.com/.

Particularly on the heels of the most recent rate cut, this report will take special significance. The Fed would like to see a core inflation rate below 2.0%, but with Bernanke and crew preferring to fight a looming recession with their continuing series of rate cuts, rather than targeting inflation with rate hikes, this will be a tough target to reach for the foreseeable future.

Since inflation is the enemy of fixed return investments like Bonds, a jump higher in the Core PCE on Friday could cause Bond prices to worsen quickly, and home loan rates pop higher.

The Mortgage Market View...


Buying versus Leasing: Two Sides of the Same Coin

Despite claims to the contrary, there really is no one-size-fits-all answer to the question of whether to buy or lease a car. In either scenario, a portion of every payment is lost to depreciation, even with the best interest rate attached. With this in mind, consider your own lifestyle needs and priorities at the time of each transaction. Please go to our website for more information on this or other Real Estate topics at http://www.tombrewerjr.com/.

Benefits of Leasing:

Lease payments are generally between 30%-60% lower than car loan payments.
It's as if you have a guaranteed buyer of your vehicle at a specified price when the lease is up. If the vehicle is worth more, you can sell it on the market and pocket the gain, if it is worth less than the lease buyout value, you just hand over the keys.
Little or no down payment is required for a lease, freeing up cash for investments with a better return.

Benefits of Buying:

With the purchase of a car, significant trade-in or re-sale value can accumulate.
There are no surprise fees or charges after the fact, for wear and tear or overuse.
Once your loan is paid off, you will have something tangible to show for the money you have spent over the years.