Nashville Real Estate Forum

Weekend Market Update

Jan. 31-Feb. 1, 2009

Before we get into the market junk….and here in the metropolitan Nashville area, the overall good news for homebuyers and refinancers is not only that mortgage rates remain extremely low, but programs are available which make deals work, such as those priced below.

We have a jumbo investor whose pricing is favorable and with no MI (mortgage insurance) and with no escrow required. Certain 100% loans are available with no mortgage insurance for veterans and for buyers in certain pockets of Davidson and Williamson Counties and all of other counties through USDA Rural Housing.

FHA loans now go up to $393,000 in Davidson and Williamson with only 3.5% required down. There are a couple of ways to get to 100% through conventional loans or down payment assistance.

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Down more than 8% since New Years Day, the Dow and S&P indices ended their worst January in history. Markets looked ahead for help from the proposed government stimulus package after digesting GDP figures that showed that the economy shrank at a 3.8% annual rate in the fourth quarter of 2008, which was the largest contraction since Q1 1982.

Mortgage rates dipped before the Fed meeting announcement and then popped up afterwards—a pattern often seen during this decade—adding evidence that we have seen the bottom in mortgage rates for this cycle. The good news for rates—continuing evidence of a weak economy and the government’s willingness to continue to buy mortgage-backed securities—was already priced into the market.

In the absence of anything new, Treasuries have been selling off since making extreme lows in December and hovering in a low range for much of January. Treasuries got to such an extreme in December that the 90-day bill at one point even traded in the negative—that is, someone not only did not receive interest but actually paid the U.S Treasury to hold their money. Treasuries have been dropping in price and rising in yield for the last two weeks. The 10-year closed at a yield of 2.84%, which represents its highest mark since Nov. 28.

The Fed did say that the government would continue buying mortgage-backed securities, which supports the mortgage market and effectively keeps a lid on rates. So, it appears rates will remain highly favorable for the foreseeable future. There will be more down and up days, but likely in a narrow range for the near term.

30-Year Jumbo 3/1 ARM (10% down, No MI)

5.45% $417,001-$600,000

30-Year Super Jumbo Fixed

6.15% $750,000-$1,500,000

30-Year Conventional Fixed
5.25% $200,000-$417,000

FHA-100% VA
5.5% $100,000-$393,300

100% Guaranteed Rural Housing w/no MI

5.5% $100,000-$417,000

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Cell: 615-579-8658 Toll-free fax: 866-321-6513

"Over every mountain there is a path, although it may not be seen from the valley."

-- Theodore Roethke

Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination, 30-day lock, subject to program. Market Update informs on market trends and is not a quote for a unique borrower.)