Rate Advisory for February 24, 2009

Tuesday's bond market has opened in positive territory following news of a plummet in consumer confidence last month and word that the Fed expects it to take a couple of years for the economy to fully recover from the recession. The stock markets are showing gains with the Dow currently up 48 points while the Nasdaq up 16 points. The bond market is currently up 8/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point. The Conference Board gave us February's Consumer Confidence Index (CCI) late this morning, showing a reading of 25.0. This was an all-time low and indicates that consumers are still concerned about their jobs and own financial situations. That is expected to mean that they are less likely to make large purchases in the near future, which will limit economic growth. This is good news for bonds and mortgage rates. Also this morning was Mr. Bernanke's semi-annual testimony on the status of the economy to the Senate Banking Committee. During his testimony he stated that he was optimistic that the recession would end later this year, but that it would take two to three years for the economy to fully recover from it. He also said that restoring financial stability is needed for the economy to recover. None of this is a major surprise but making it official word from Chairman Bernanke gives the market benchmarks to follow. January's Existing Home Sales report will be posted late tomorrow morning. This is one of the least important reports of the week, along with Thursday's New Home Sales report. They measure housing sector strength and mortgage credit demand, but usually do not have a significant impact on bond trading or mortgage rates. The Existing Home Sales report is expected to show an increase in sales but new home sales are expected to fall slightly. If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

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Brian Leavitt, a Licensed Real Estate Broker and Licensed Mortgage Broker representing Northstone Real Estate Inc, and Northstone Mortgage.

Brian serves clients within the Northwest Multiple Listing Service.

You can contact Brian directly by phone at 800-806-3145 or by email at brian@northstone.net. Click here to view his client newsletter.

Brian is licensed with the Washington State Department of Licensing and the Washington State Department of Financial Institutions License number 510-MB-19802 and is a member of the Seattle King County Association of Realtors and Northwest Multiple Listing Service.