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Here are the shocking numbers as of September 17, 2009
Did you know that you can view almost up to the minute national debt numbers? The numbers above are what has the Feds, Congress, the Obama administration, and the public very nervous lately.
The stock market is down this morning. The DOW is down about 80 points, NASDAQ down almost 9 points, and the S & P index down almost 10 points. Following the move out of equities, investors are also nervous about commodities., after cautious outlooking comments from companies such as Caterpillar (building and agricultural machinery giant) and Potash (fertilizer giant). Oil is down under $70/barrel today, wholesale gas prices are down a bit, even gold prices have dropped this morning.
The yield on the 10 year bond is also down, signaling that investors are again moving money to the security of government backed Treasury bonds. While this should be good for mortgage rates, other news from the Feds, expected later this week could dampen home buyer enthusiasm.
The Feds will be meeting Tuesday and Wednesday this week to discuss the continuation or lack thereof, of the Feds purchase of mortgage backed securities. The Feds purchase has been keeping mortgage rates down all year, but the program is scheduled to end December 31 of this year. There is a lot of controversy about whether or not this stimulus is still required as the recession seems to be winding down, and housing values are “stabilizing.” But perhaps equally important is the growing public sentiment that the government needs to stop spending, and it is time to allow the markets to find their own level.
Currently mortgage rates are around 5% for the 30 year fixed rate mortgage. If the Feds pull out of stimulus, will the housing recovery cease and do a rapid turnaround back to where we were before all this government intervention? Ben, Bernanke is in the midst of a conundrum I personally would not like to be facing. I always have to question the wisdom of too much government intervention, but since the Feds have been throwing money at housing to stimulate the market, my personal opinion is that perhaps they should back out slowly, rather than all at once. The public, and the markets can get used to a slow withdrawal of stimulus. But how will we handle an abrupt change?
What do you think? Your comments are always appreciated and welcome.
For more information about the Federal stimulus programs, please see the article Feds are meeting this week, will results of this meeting drive mortgage rates UP?
Comments
I'am a custom home builder here in north east Ohio. So far this so called stimulus has done nothing directly for my business. To give you a idea how bad it has been, my last start for a home was 3 years ago. We have been treading water since then by doing remodeling & room additions and those are few and far in between. We have clients in line for homes, but they all have to sell there homes and are concerned about job employment. So the existing house market has to improve before we see any changes. Good luck everybody !
Woodchuck - thanks for writing. This crisis has been hard on everyone involved in the housing industry. I'm a mortgage loan officer. While I've been treading water by doing refinance transactions, for those few who actually qualify under the tighter lending guidelines, I know of many in my field who are tending bars or whatever else they can do to make ends meet. Realtors are also feeling the pinch. It's been pretty ugly out there and I wish I had a crystal ball so I would know when this will all end. Good luck to you too.
I say let the market find its own level. I have been chasing the coattails of this forsaken housing bubble, never able to afford even an FHA loan with 3% down because my income and savings couldn't increase fast enough with how quickly housing went up. Historically, housing gained value at the same rate of inflation. The housing market went crazy with loose lending practices plus a mania chant to invest in housing: "housing never goes down!" Now that the smoke and mirrors are gone, we realize what our country lacks. Real education and real jobs...and we have a shortage of honest people. We've borrowed the money from tomorrow - from the next several generations - to enjoy a decade of selfish over-spending and splurging, living like it was the roaring 20s to the power of 10. So when housing prices drop, I cheer. I have no home, no investments, and practically no debt. And I believe I can take advantage of the world's biggest clearance sale.
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