Happy Memorial Day

Memorial day is a very special day to remember those who have given the ultimate sacrafice for the country in which they loved. I hope you take a minute during the weekend to say a prayer for our country, leaders, and the men and women of the armed forces who protect our way of life.

Have a wonderful time, crank up the grill and please give thanks to those who helped make it all possible. Here is a link to the history of how Memorial Day became a reality. Enjoy your weekend!
http://www.usmemorialday.org/backgrnd.html

Bonds Continue Rally

These past few days has been good for Mortgage Backed Securities and the Bond market. The rally has pushed Bond prices above the 200 day moving average, causing interest rates on a 30 year fixed rate loan to fall into the middle 4% range. How long the rally will last is uncertain. As the economy continues to weaken and news of unemployment, lower housing starts, and high gas prices, hit Americans hard, the "Safe Haven" of bonds has driven bond prices to almost the highs not seen since last November 2010.

If you are one of those people who have a 6% loan on your home and want to lower your payments, now is a tremendous time to make that happen. Also, the price of existing homes are at great prices as sellers want to sell and will help with closing costs if you are considering a purchase. With all the negative news, there are some positive signs when it comes to refinancing or purchasing a home right now.

Producer Wholesale Inflation...

...is at 6.8%! That is very hot and is a result of the Producer Price Index (PPI)coming in at 0.8% for April. This high number was a much higher than anticipated number of 0.5%! When you strip out food and energy costs, Core PPI is now at 0.3% for the month, which now makes the year over year Core PPI Rate at 2.1% It is my belief that Producer or Wholesale inflation does not always get passed on to the consumer. At some point one of two things are bound to happen - either the company, which is now stuck with increased costs, must pass the increase to the consumer by raising prices, thus boosting consumer inflation, or the second option is for the company to eat those higher costs, whih will hurt earnings, crippling the ability to expand and/or create jobs, which then causes futher slowing of economic growth. It is a vicious cycle which must be broken and government needs to get out of the way and allow companies to do what they do best, and that is produce, make profits, and employ people.

The Initial Jobless Claims were 434,000, above expectations of 423,000, and way above the 400K mark, providing evidence that the struggles in the labor market are not "transitory".

Rates have remained below the magical 5% range for a couple weeks now. What a great time to buy a home, if you have a good, solid job and good credit!