Market Minutes

Mortgage rates are modestly improving after some important announcements this week. Wednesday’s policy statement issued by the Fed left benchmark rates the same and reiterated inflation continues to be contained. The Fed also confirmed they will continue to use their resources as necessary to boost the economy, but did not increase their total commitment to purchase mortgage-backed securities – a move that would have helped improve mortgage rates. Perhaps the biggest news of the week was released this morning – 190,000 jobs were lost in October and the unemployment rate has jumped to 10.2% (the highest since 1983). On the heels of this news, mortgage markets are modestly improving.

Legislation update:

The bill to extend and expand the First Time Homebuyer Tax Credit has passed the House and Senate and is expected to be signed by President Obama as early as today or tomorrow. The bill provides for the following:

• $8,000 tax credit for first time homebuyers
• $6500 “move up” credit for homebuyers owning a home 5 of the last 8 years.
• Income limits increased to $125,000 for single filers and $225,000 for joint filers.
• Eligible sales price to $800,000.
• Program extended for buyers signing a purchase contract by April 30, 2010 and closing by June 30, 2010.
• For members of the military serving outside of the US on official duty for 90 days during January 1, 2009 and May 1, 2010, the program extends to contracts signed before May 1, 2011 and closed before July 1, 2011.