June 24, 2009 Rate Update:  Fixed Conforming ($417,000 max loan - 10% dn min)= 5.125%; Fixed Fha ($346,250 cap)= 5.375%; 5/1ARM FHA= 4.500%; Fixed Jumbo(20% down)= 5.625%. 

Market Update:  

It's Fed Day. At 2:15 the Fed will release their Monetary Policy Decision and Statement.  And while there will be no change to the Fed Funds Rate, the financial markets will be listening for any potential surprises.  Will the Fed talk about raising interest rates down the road?  The Fed Fund Futures contracts are forecasting a 100% likelihood that this will happen by the end of the year.  And never say never - even though the Fed has never raised rates while unemployment is rising...and we anticipate unemployment to continue to rise...the US Dollar's disintegration may force the Fed to start hiking rates by the end of the year.

Additionally, there is speculation about the Fed expanding it's purchase of long-term Treasuries, which could benefit Mortgage Bonds (see yesterday's update for more depth on this).  If there is no mention of additional purchases, Mortgage Bonds could get clobbered.  So remain closely tuned, especially after 2:15pm ET.

Durable Orders for May were reported at 1.8% versus expectations of -0.9%, fueled by orders for airplanes and machinery signaling that the economic slump may be easing.  When stripping out transportation, orders rose 1.1%, higher than the -0.5% that was estimated.  One report doesn't make a trend, but this reading is encouraging.  

New Home Sales were reported at 342k units, which was below expectations.  The news had little impact on the markets.

Awaiting the market's reaction to both the auction and Fed Statement to see how rates are adjusted.

 The above are base rates for purchase transactions. Client quotes are determined during an individual consultation taking in consderation credit score, loan amount, down payment, origination fee, points, closing cost and the lock in term which will constitute disclosing an apr and closing cost work sheet. 

Rate and Market Update provided by:

Bank of America Senior Home Loan Officers

Kathy Vitali.......770.540.5566 ....... kathy.vitali@bankofamerica.com 

Gary Welch.....770.888.2232 ....... gary.welch@bankofamerica.com

For more information on Alpharetta real estate, and Alpharetta homes for sale, visit www.MoveToAlpharetta.com today.