The week in review:
The Economic Stimulus Plan for 2009 was signed by President Obama last week. He also unveiled the initial details of the Homeowner Affordability and Stability Plan.
Uncertainty related to the new stimulus packages and fears of a deepening recession caused the stock market to plunge last week. Normally, falling stock prices cause home loan rates to improve but that did not happen last week. Interest rates ended up no better than they started off.
What to expect:
We see continued volatility in the markets this week. Will the Dow be able to stay above the October 2002 low of 7,197? If stocks dip below this level, will mortgage bonds and home loan rates improve?
Although there are reasons to believe home loan rates can go lower from here. There are also plenty of arguments that suggest rates may have a hard time improving. One argument that is hard to ignore is the fact that home loan rates would normally have improved last week and did not.
Breg-ometer:
Next 7 days: Ups and downs. Unless we get significant news from Washington, no real changes expected.
Next 30 – 90 days: Rate improvement possible
Courtesy of:
Bob Bregitzer
[where: 30339]