Rates will rise, tax credit will go away, but there is still time if you act NOW!

In an article from my Lender friend Leah Marchbanks;

The general consensus is that rates will be moving up and there will no extension of the tax credit…..



In economic report headlines, Durable Goods Orders for March

fell by 1.3%, well below the 0.1% increase expected. The drop

was attributed to a decline in aircraft orders, and when stripping

out transportation, new orders rose by 2.8%, far better than

expectations of 0.7%, representing the fastest growth rate since

December of 2007. Durable Goods Orders are volatile reports

month to month, so we can't read too much into one report…

and we also must consider that these numbers are coming off

of very low levels, so it is easier to see sharp increases.

Mortgage Bonds remained lower on this news.



New Home Sales for March were reported this morning, and

very clearly, the First Time Home Buyer stimulus pushed

buyers into action. 411,000 New Homes were sold, which was

a huge increase from last month's upwardly revised 324,000

reading. The pace of sales also spiked, thus pushing the

inventory of unsold new homes down to a 6.7 month level, far

below February's 9.2 month reading. Weather also likely

played a big part in this improved number as we saw plenty of

snowstorms throughout the country in February, helping the

pent up demand be seen in March’s numbers. It will be

interesting to see how future numbers fare once the

government stimulus – the Tax Credit which expires next week

is removed.



Yesterday, the Treasury announced it will unload a whopping

$129B of debt next week in 2, 5 and 7 -year Notes. This supply

could be a headwind for Bonds next week, forcing mortgage rates

higher.