It’s time again for the Illinois Mortgage Rates and News week in review, my take on the week’s financial news and how it affected Illinois mortgage rates. Over the last month or two we’ve been in a see-sawing, back and forth, up and down market with mortgage interest rates trying to find direction. Mortgage rates go up or down based on movement in the mortgage backed securities market. Mortgage bonds improve when there are signs of economic weakness, and they get worse when there are signs that the economy is growing and there is a threat of inflation. Over the last few months we’ve changed directions every few days as the market reacted to the latest economic news, up for a few days, down for a few days, the trend going back and forth. Now, with the start of the New Year, I think a major trend has been established, and we are more likely to see lower mortgage rates in the future.

This morning the jobs report came out and employment increased by 18,000, much lower than the 70,000 jobs that were projected, and the unemployment rate increased from 4.7% up to 5.0%. Even the 70,000 projected figure is low. It takes about 150,000 new jobs per month just to absorb new entrants to the job market. The employment number is usually the most watched economic indicator of the month, and the softness in the job market is another sign that we may be heading for a recession. This makes the odds that the Fed will cut their rates again at their next meeting a near certainty. The question is whether they will cut another .25% or a full half point.

Other news from this week has been along the same lines. Manufacturing was down more than expected and home sales were down, as expected. There is still some news that shows inflation is still a threat. Oil prices hit the $100 per barrel price this week, which means higher prices at the pumps. But if wages aren’t going up, this is more likely to mean that consumers have less to spend and not that prices are going out of control. The net result of all this is that Mortgage bonds are up slightly on the news today, and Illinois mortgage rates are slowly dropping.

With all the information pointing to an economic slowdown, does this mean it is a bad time to buy a home? I don’t think so. Whether buying a home makes sense or not depends on your personal situation. If you are in the market for a home the inventory of homes available is high, and it is a buyer’s market. So you are more likely to get a deal that works for you. The economy here in Northern Illinois and around the Chicago area is diverse, and stronger than much of the country. Real estate is local, and the Chicago area never experienced the extreme highs that some other areas saw, and we’re not seeing the drop in prices those areas are seeing now. If you are buying for the long run real estate has always been a great investment.

Here is what Illinois mortgage rates look like today for an A+, full doc purchase on a 30 day rate lock with 0 points, and no origination fee.  (Again, there are dozens of factors which affect mortgage rates and your ability to be approved for a loan. These rates may not fit your situation and this is just a sample of the programs that are out there. If you would like a quote for your personal situation, give me a call or contact me and I’ll take the time to find the rate and program that is best for you.):

Conventional loans up to $417,000

30 year fixed rate    5.75%      6.838% APR

15 year fixed rate    5.125%    5.237% APR

5-1 A.R.M.               5.375%     5.649% APR        

7-1 A.R.M.               5.50%       5.847% APR

For Jumbo loans over $417,000

30 year fixed rate    6.25%       6.375% APR

7-1 A.R.M.               6.125%     6.229% APR

FHA LOANS up to $270,200 with 1 point origination fee

30 year fixed rate    5.50%    5.823% APR

These are just a sampling of the rates available. We have special programs for first time home buyer and all the bond programs including the City of Chicago Bond program and the State of Illinois Bond program with no down payment below market pricing. There is not a lot of economic news coming out next week, so it should be a quieter week next week.

Illinois Mortgage Rates and News.

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

Tonight is the night of the Iowa caucuses, the first event of this Presidential election year. It Looks like Obama is the winner on the Democratic side, and Huckabee for the Republicans. Up until now the primary election has been in the background, white noise for all but the true political junkies. That changes tonight. Starting tomorrow, the news will be filled with results and conjecture, pundits telling us what has happened, why it happened and how this will all play out over the next eleven months. As time goes on more people will start paying attention, and within the next month or so we will know who the nominees are from both parties.

Right now all the candidates are talking about health care, immigration, the war in Iraq and other issues. Little is being said about the state of the economy, and the housing slump. But one of the oldest truisms in politics is that people vote by their wallets. If the economy is slowing and homeowners are feeling squeezed, you can bet that this won’t be good news for the party in power.

As the year goes on I expect that the problems in the housing and mortgage markets will become a big issue on the campaign trail. Maybe the dominant issue. My question is, how will this play out and what will the proposed solutions be? Campaigns are always good with promises, real solutions are harder to come by. The popular remedies aren’t always the best. I hope the campaigns work toward realistic programs that take account of how complex the market is and don’t just rely on easy answers that help some people in the short run but make the problem worse.

Illinois Mortgage Rates and News

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker

Here we are on the first business day of the New Year, and we are already off to a wild start. How wild?

• The ISM National Manufacturing Index came out with a reading of 47.7, much lower than expected. A reading under 50 suggests that the economy is slowing down with the threat of a recession on the horizon.
• Oil prices hit $100 per barrel for the first time ever.
• The minutes from the last Fed meeting were released and showed that the Fed is expecting the economy to weaken due to the housing slump and low consumer spending.
• There’s violence in Kenya and more unrest in Pakistan.
• The stock market started out the New Year with a very bad day.

So how did all this turmoil impact Illinois mortgage rates? Mortgage backed securities moved higher, extending their streak, and mortgage rates dipped lower. Illinois mortgage rates can again be had for under 6.0%.

The last time Illinois mortgage rates dropped down this low was about a month back. The low rates only lasted a couple of days before jumping back above the 6.0% mark. More information has come out that the economy is slowing, and bad news for the economy is good news for those wanting lower mortgage rates. The betting now is that the Fed will cut rates again at their next meeting later this month.

I think the long term trend is going to be for lower mortgage rates. But the news is still a mixed bag. High oil prices can be seen as inflationary and money flowing into bonds because of foreign unrest can flow out just as quickly. If you are thinking of buying a home or refinancing your mortgage this could be your chance to take advantage of the low rates now.

Tomorrow there will be more economic news to move the market. The Iowa Caucuses will kick start the next phase of the Presidential election, bringing more uncertainty to the political arena (except for the certainty that our next President will not be George Bush). Friday the employment report comes out and this is always the report that gives traders ulcers and makes the markets rock and roll. The New Year is starting out wild, and chances are that this will be a wild, wild year.

Illinois Mortgage Rates and News

Find the Maximum FHA Loan Amount in Your Area Here illinois FHA loans

Contact Your illinois mortgage company Today

We Offer illinois home mortgage Loans with best mortgage rates

Get Best Advice from illinois mortgage broker