Like everything else on Wall Street, mortgage markets are based on supply and demand.  When demand outweighs supply, mortgage rates fall.So, Tuesday, when the government unexpectedly announced a $500 billion budget for buying mortgage debt from Fannie Mae and Freddie Mac, the demand side of the mortgage market ballooned.  The surprise demand helped push mortgage rates to their lowest levels since January 22, 2008.  30-year fixed mortgage rates were down by as much as three-quarters of a percent Tuesday before retreating higher. Not coincidentally, January 22, 2008, was the date of ...

In real estate, the term existing home refers to a "used" property; one that can't be classified as new construction.The number of existing homes sold each month is tracked by the National Association of REALTORS.  The report is often used as a gauge for the health of the real estate market nationwide. In October, nearly 5 million existing homes sold across the U.S.  This figure represents a slight drop from September's reading, and a equally slight drop from the October 2007 data. But, October's Existing Home Sales figures marked the 14th straight month in which Existing Home ...

As the stock market retraced to its 1997 level, mortgage markets improved last week -- but not by much. Mortgage rates closed out the week slightly lower, but the week wasn't without fireworks. Calls of deflation grew louder The automakers left Washington without a bailout Citigroup's stock price fell to the equivalent of its ATM fee Separately, each of these elements would have created confusion on Wall Street.  Together, they created near chaos.  Stocks traded at a pace last week that has never been equaled. As a result, mortgage rates were volatile, too. Over the ...

Business television and newspapers have made deflation a hot topic this week and, since Monday, Google has tracked 13,000 mentions of it.Deflation is a recurring cycle in which the prices of goods and services fall. Isolated to one industry or sector, falling prices is the natural result of competition.  For example, when DVD players were first introduced, they were tagged at $800.  Today, you can buy them for less than $20.  Across many industries, however, and happening at the same time, falling prices can shut down the economy.  Rather than buy things on the cheap, people ...

When it comes to housing data, there are always two questions to consider: How does this impact buyers? How does this impact sellers? This is why housing data is rarely positive or negative on a universal level -- one group of Americans is going to see benefit.  Today, it's home sellers.  From the government, we learn that Housing Starts fell to their lowest levels since 1947 last month.  A "Housing Start" is a new housing unit on which construction has started.  Building permits are down, too. This is all good news for people selling their homes in the coming months.  ...

If the presence of inflation causes mortgage rates to rise, then the absence of inflation should cause mortgage rates to fall.  And, in most markets that's true. Today, it's not. Despite a deep dip in consumer prices not seen since 1947, mortgage rates are inching higher this morning. The main reason why rates are rising today is that the Cost of Living didn't just ease last month -- it plunged.  In fact, the monthly drop was so severe that Wall Street now questions whether this summer's record-breaking inflation will lead to equally-strong deflation this winter. In ...

In March 2008, HUD temporarily raised FHA loan limits around the country.  Effective January 1, 2009, FHA loan limits revert.FHA home loans are mortgages made by private lenders and insured by the federal government.  Historically, FHA home loans have been "easier" for which to qualify than their conforming mortgage counterparts and, therefore, tend to be associated with borrowers of tarnished credit quality. Today, that's the not the case.  The FHA home loan underwriting process can be as tough -- or tougher -- than a conforming mortgage underwrite.  There is extra ...

In another week of up-and-down trading, mortgage rates ended the week slightly higher last week. Ping-pong action like this has defined mortgage markets lately.  It's increasingly common for rates to soar one day, and then come crashing down the next.  In response to market volatility, mortgage lenders issued as many as 8 distinct rate sheets in a holiday-shortened, 4-day trading week.  Lately, shopping for a low mortgage rate has been as much about timing as anything else. There wasn't much economic news to digest last week save for Friday's Retail Sales data.  The numbers ...