Friday, January 4, 2008

Interest Rates: How Low Can They Go?

This morning for the sixth day in a row, interest rates have improved. One of several factors is a weaker-than-expected job market. Sorry to those who are looking for work, but to those who are looking to refinance, this is good news. The 30 year fixed rate is now hovering around 5.125% (subject to change on a whim). Some are speculating that the Fed will issue a 50 basis point interest rate cut at the end of the month (which doesn't always and everywhere translate into lower mortgage rates, but it can and sometimes does).

"Jobs losses were concentrated in manufacturing and construction, hit by declining competitiveness and the housing downturn. However, retail also lost jobs, suggesting that consumers may be holding off from spending."

Speaking of job losses due to the housing downturn, the Seattle Times reports that fewer than half of the loan originators who applied for the newly required state license have fulfilled the state's requirements. A good number of brokers and loan officers seem to have just given up for awhile. Oregon's licensing laws are similar to Washington and hopefully the next time we have a real estate boom, this will keep out some of the riff raff and we won't run into another mess like the one we're in today.

"Meantime DFI has denied 170 applicants because of criminal history, bad credit or "character and fitness issues." Felony or gross misdemeanor convictions within the previous seven years accounted for the majority, Bortner said."

The mortgage lending times - they are a-changin'.

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