Do You Have Questions About the New First Time Home Buyers Tax Credit Extension?

Unemployment Rate Jumps

Investor sentiment about the economic recovery fell this week, and the stock market declined.
Expectations for slower economic growth are favorable for bond markets, including mortgagebacked
securities (MBS), and mortgage rates ended the week a little lower.
The important monthly Employment report showed mixed results. Against a consensus forecast
for a loss of -225K jobs in August, the economy lost -216K jobs. This was the smallest level of
monthly job losses since August 2008 and was far below the monthly average of -691K seen
during the first quarter of the year. The biggest surprise in the data came from the
Unemployment Rate, which jumped from 9.4% to 9.7%, the highest level since 1983. The
unexpected increase was mostly due to previously discouraged workers returning to the labor
pool to look for jobs. Average Hourly Earnings, a proxy for wage growth, rose at a moderate
2.6% annual rate.

The future of Fannie Mae and Freddie Mac made the headlines this week when the Mortgage
Bankers Association (MBA) released its restructuring proposal. While the MBA suggested the
elimination of the two agencies, it would replace them with new entities which would perform
many of the same functions, with many of the same people. Its plan would maintain a
government guarantee of principal and interest for MBS investors. The two agencies have
played a pivotal role in keeping mortgage rates low and in expanding homeownership, and the
MBA proposal would retain these benefits. It’s very early in the process, and the Obama
administration indicated that its proposals for Fannie and Freddie may not be revealed until
early next year.

Also Notable:

• July Pending Home Sales rose to the highest level since June 2007

• The European Central Bank (ECB) held interest rates steady

• The Treasury announced that it will auction $70 billion next week

• The Fed purchased $26 billion in agency MBS during the week ending 9/2

Week Ahead

Treasury auctions may have the greatest impact on mortgage rates next week. There will be
$70 billion in 3-yr, 10-yr, and 30-yr auctions on Tuesday, Wednesday, and Thursday. It will be a
light week for economic data. The Fed’s Beige Book will be released on Wednesday, and the
Trade Balance will come out on Thursday. Import Prices and Consumer Sentiment are
scheduled for Friday. Mortgage markets will be closed on Monday for Labor Day.

Mortgage Market News Provided by Fairway Independent Mortgage

Fairway Mortgage in Winston Salem can be reached at (336) 714-1560.

Time is Winding Down for First Time Home Buyers Tax Credit

First time home buyers who want to take advantage of the $8000 Tax Credit need to be looking aggressively for a home.  The deadline to qualify is to be closed on a home by Novermber 30, 2009.  A real estate transaction in NC typically takes at least 30 days to close, but can take longer.  So, to ensure this, a buyer should be under contract on a home by the middle of October to leave room for any potential delays in closing.  If you are a first time home buyer, you need the assistance of a Realtor.  Please give me a call or text at 336-462-9544 so we can help fulfill your dream of owning a home.

Tony Green, Realtor

Tony Green is REALTOR® who works in Winston Salem, Clemmons, and Lewisville NC and the owner/broker of EXIT Realty Elite. He attended Appalachian State University (go App!) and graduated with a BSBA in finance and real estate. He likes walks on the beach, cute little puppies, and smash mouth wrestling...and maybe a little humor from time to time. :D Tony looks forward to serving you and helping you with your real estate needs.

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