Nashville Real Estate Forum

Weekend Market Update

March 6-7, 2010

Mortgage rates continue to cling to a range of lows for 2010, although no one is betting they will remain here long.

Interest-rate sensitive instruments were rocked after the Labor Department reported its February non-farm payrolls number (36,000 jobs lost) as better than expected as were its tally of average hours worked and unemployment rate, which was posted as 9.7%. Lenders scrambled to reprice mortgage rates for the worse and the 10-year Treasury dropped; however, by the market’s close, mortgage-backed securities had regained most of the day’s losses, and some lenders reversed themselves.

For the week, the action in mortgage rate pricing ended about like it started, which was in the range of lows for this year. The bottom was hit on Feb. 5, but we are back in that zip code at this point. All my market resources are screaming that now is the time to lock rates as the balance of the year is expected to see interest rates move higher.

U.S. stocks posted another week of strong gains, led by the NASDAQ index, which settled Friday at its highest close since September 3, 2008.

Although all markets are choppy over most time frames, and movements are more backing and filling instead of straight-line rocket shots (or crashes), it may be safe to say it this way: the line of least resistance for stocks appears to be up; the direction of least resistance for mortgage-backed securities and bonds appears to be down (in price, which means up in rate and yield as these instruments must increase rate and yield to draw buyers).

While the stock market generally liked the unemployment number---but only for not being worse---the true unemployment rate, counting long-term unemployed persons who are off the charts and who are listed as having given up seeking a job---is probably closer to 17%.

Education level correlates to the unemployment rate, as better-educated Americans have lower unemployment than others. The following analysis (and my quote from Einstein below) come from Chart of the Day (http://www.chartoftheday.com/20100305.htm?T):

“Today, the Labor Department reported that the unemployment rate held steady at 9.7% during the month of February. For some perspective on the current state of the labor market, today's chart illustrates the unemployment rate by educational attainment.

“As today's chart illustrates, a higher educational attainment has correlated with a lower unemployment rate. For example, the unemployment rate for those that have not completed high school (red line) has increased from 5.8% to 15.6% over the past 40 months -- nearly a 10 percentage point increase. Compare that to the unemployment rate for those that have obtained a bachelor's degree or greater (blue line).

“The unemployment rate for those with a minimum of a bachelor's degree is currently three percentage points above where it was 40 months ago. In any event, the upward trend in the unemployment rate (for all education levels) has slowed in recent months.”

30-Year Conventional Fixed

4.75% $100,000-$417,000


FHA-100% VA

5% $100,000-$393,300


100% Guaranteed Rural Housing w/no MI

5.5% $100,000-$417,000

30-Year Jumbo Fixed

6% $417,001-$900,000

(Interest-only available-Call me)

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

"The value of an education ... is not the learning of many facts but the training of the mind to think something that cannot be learned from textbooks." - Albert Einstein

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http://www.BrentwoodHomeLoan.com

(0% points, 1% origination, subject to program and lock period. Market Update informs on market trends and is not a quote for a unique borrower. Reply "remove" with your name and email address to discontinue Update.)