Market Update - Wake up call….

I’ve been thinking all day, how do you describe what happened in the markets today? And how do you describe it when you don’t have time to write?   That’s why this is going out so late……

I think that a “Wake Up Call” is probably a good description of it:

• We woke up to the realization that GM and Chrysler aren’t going to make it in their current form.
• We woke up to the realization that the government finally appears to be making some significant efforts to reshape the auto industry.
• We woke up to the realization that the shape they are going to put it in is probably not the shape that the stock holders, bond holders and pension funds are going to like, let alone the taxpayers.
• We woke up to the realization that the auto industry is not the the only one that needs a major overhaul.

So what did mortgage rates do?   Nothing.   Absolutely no change since Friday.

What do I see going forward?  I think it’s safe to say that the bear market is coming back and we’re going to see additional volatility in the financial markets and the overall trend is going to reverse from what it was (meaning it’s going to go down).

Rates today were at:
4.875% with 0 pts for a 30 year refi
4.625% with 0 pts for a 30 year purchase
(both under $417,000 and with credi scores of over 720)

15 year was .125% lower.

My recommendation:   Lock all loans.   While there is a possibility rates could go lower, in the volatility of today’s market, I think it’s more important to guarantee savings and lock in than it is to run the risk of missing out because things turn around and jump back up.

Sorry this didn’t go out until late.   I hope to be able to do tomorrow’s update much earlier!

March 30, 2009