Hi fellow readers! Today I would like to take this opportunity to introduce my guest author and Florida Home Loan Specialist Kevin Sandridge of Signature Home Funding. He will periodically provide you with the insight of the mortgage industry on my blog. I’m sure you’ll enjoy his reading and insights as evidenced by his blog posts.

Mortgage markets rallied last week thanks to Government action that took mortgage rates lower for the second week in a row. In the face of less than stellar housing numbers and signs that our economy may still be slowing, mortgage rate shoppers here in Winter Haven and Lakeland, Florida were presented with a few reasons to rejoice.

• Citigroup was “rescued”
• Wall Street approved of the new economic team
• The government promised to put up $600 billion to buy investment-grade mortgage bonds

Working together, these three things contributed to mortgage rates that are at lows we have not seen since the first part of 2008 — in some instances seeing as much as a full percentage point reduction off the offered rate.

Refinance Activity Increases

The rate drop has been no secret to homeowners as they rushed to refinance their mortgages in near record numbers — especially those with ARMs who might be facing sharp payment increases.  Proof of this comes as at at least one national mortgage bank reported that more loans locked on Tuesday, November 25 than were locked during the first 24 days of the month combined.  This is all very exciting. However, low rates rarely stick around.

The last time that rates dropped like they did last week, markets bounced back within a week and rates returned to “normal.”  We might very well see that happen again.

Fed Members Due for a Big Show

This week, 5 members of the Fed will appear publicly, including Fed Chairman Ben Bernanke.  The Fed’s next meeting is scheduled for December 15, and as always, markets will be looking for signs as to what, if any, changes the Fed may make regarding the Fed Funds rate. As you know, when the Fed Funds Rate falls, mortgage rates usually rise – at least initially.

Retailer Same Store Sales Figures Due Thursday

This week also provides us with retailer reports regarding their November “same store” sales figures.  These numbers should help us gain a better understanding of exactly how healthy the economy really is, as consumer spending comprises two-thirds of it.  If same-store sales come in asexcessively low, expect calls for the Fed to deliver a large rate cut.

Friday Jobs Report

November employment numbers arrive on Friday.  These numbers have been terrible all year, so November job numbers will have to be very, very bad  – causing a huge spike in unemployment in order for us to see any significant impact on mortgage rates.  This said, we could actually see a bit of an uptick in mortgage rates as more out of work Americans could result in greater number of mortgage defaults across the nation.  If the Fed cuts rates, esp, weak jobs data should be harmful to mortgage rates because more out-of-work Americans could result in more mortgage defaults across the nation.  If the Fed cuts rates, expect mortgage rates to climb for sure.

(Image courtesy: The Wall Street Journal Online)

I hope you enjoyed this article. As your Florida Home Loans Specialist, I’m here to answer any questions you might have about the mortgage industry. If I can help you locate financing for your Florida home purchase or assist you with a refinance, please do not hesitate to contact me at 863-604-3019.