FHA mortgage Rates (Nov 14)

Daily FHA Mortgage Rates Recommendation: If I were closing on an FHA Home Loan anytime within the next 7 days I would lock in my FHA Mortgage rate.
Friday’s bond market has opened in positive territory following the release of weaker than expected economic news. The stock markets are posting sizable losses after yesterday’s late rally in stocks hurt bond prices and mortgage rates.  The Dow is currently down 260 points while the Nasdaq has lost 60 points.  The bond market is currently up 22/32, but due to yesterday’s late losses we likely will not see much of an improvement in this morning’s mortgage rates.

October’s Retail Sales report was posted this morning, showing a surprising drop in sales of 2.8%.  This was a larger decline than was expected, the fourth consecutive monthly drop and the largest monthly decline since January 1987.  This indicates that the economy is still softening, which is good news for the bond market and mortgage rates.

The second report of the day was the preliminary reading to the University of Michigan’s Index of Consumer Sentiment for this month. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It revealed a reading of 57.9 that was a little stronger than expected, but not enough to negatively affect bond trading.

Next week is moderately busy with economic reports but it does bring us the release of two key inflation readings that can significantly impact bond prices and mortgage rates.  The week kicks off Monday with the release of October’s Industrial Production that tracks manufacturing output.  This report is considered to have a medium level of importance to the markets and is expected to show a small decline in output.

Besides the two inflation readings and Monday’s manufacturing report, we also will get the minutes from the last FOMC meeting and a couple of other lesser important releases.  Look for more details on next week’s events in Sunday’s weekly preview.

Fed Rate Cut

The Fed Rate Cut came this morning, lowering it by .5% down to 1.5% and also lowered it’s discount rate by the same to 1.75%. They say the the move was necessary because of the global financial crisis. At the time of this post US stock futures is turning around.

The Federal Reserve coordinated a global cut in interest rates in cooperation with the European Central Bank, the Bank of England, and a host of other central banks across the globe, finally giving the market the bottle of milk it’s clamored for the last two days.

Despite some of the most aggressive actions by central banks that anybody has witnessed since the Great Depression. The Fed here has done everything it can to attempt to re-flate the stalled credit markets, getting to the point where it agreed to buy unsecured debt, while giving corporations access to its borrowing windows.

The Fed rate cuts are just the latest in a series of groundbreaking moves by the world’s top central banks to try to breathe life into embattled financial markets.

Earlier in the week, the Fed took steps that could potentially make trillions of dollars available to banks and the nation’s leading businesses. That’s on top of the controversial $700 billion Wall Street bailout approved by Congress Friday. Earlier Wednesday, the Bank of England announced a bailout plan of that nation’s banks, as it said at least $350 billion will be made available to British banks.

Today’s fed rate cut was the eighth since September 2007 and the second outside of a regularly-scheduled meeting. But the Fed had left rates unchanged at its last three meetings ahead of this emergency cut. The Fed’s next monetary policy meeting is a two-day session that concludes on Oct. 29.