By: Michael Dormer, Independence Mortgage Services
mdormer@independencemortgageservices.com

This week was a crazy week for mortgage-backed securities (the index that drives interest rates), as the Department of Labor revised previous reports on US job growth, in the midst of a heavy economic news week. With lots of action on both sides of the field, interest rates gained back some yardage and improved approximately 0.125% across the board, which drops the 30-Year Fixed back below the 6.000% mark. The market in the Pacific Northwest is still ripe for buying/selling as mortgage rates continue to be very favorable!

In economic news: As expected, the Federal Reserve Board decided to leave the overnight lending rate unchanged at 5.25%, which was in line with expectations. However, the big news was their continued warning that they will keep a vigilant eye on inflation, and will raise rates further if inflation picks up any steam. Right now, hindsight appears to be 20/20, as the economy appears to be moderating and the Fed, in turn, appears to have made the right move in remaining patient with the US economy.
A word to the wise: If you haven’t taken a serious look at your savings portfolio in some time, you might want to make it a late New Year’s Resolution to do so. One of the reports that came out last week was the Personal Savings Rate, which measures how much Americans save vs. spend. For all of 2006, the savings rate was -1.0% … that’s right, a negative number! This means that Americans actually do spend more than we make across the board. This is the lowest savings rate since 1933 – during the Great Depression! If you feel your own savings plan may need some beefing up (and whose doesn’t??) … please feel free to contact me. We can take a look at some mortgage planning strategies that might help supplement your savings, or we can connect you with a financial planner who can help get your goals back on track.

Labels: interest rates, mortgage, real estate