Weekly Mortgage Market Report: Mortgage Rates Move Slightly Lower During Week On Slowing Economy And Fed Policy Changes

6 08 2010


A slow economic recovery and the possibility of a Fed policy change helped mortgage rates move a little lower again this week. As a result of recent weak economic data, the Fed is reportedly considering the purchase of additional mortgage-backed securities (MBS) to replace maturing securities. These factors, along with limited inflation, make current economic conditions supportive of low mortgage rates.

In particular, Friday’s weaker than expected Employment data was positive for mortgage rates. Against a consensus forecast for a loss of -90K jobs, the economy lost -131K jobs in July. This included the loss of -143K census positions. Private employers added 71K jobs, below expectations of 100K. The Unemployment Rate remained at 9.5%. Average Hourly Earnings, a proxy for wage growth, rose at a tame 1.8% annual rate.

To stimulate the economy, the Fed purchased $1.25 trillion in mortgage-backed securities (MBS) in 2009 and early 2010. Due to defaults, refinancings, and maturities, some MBS “roll off” the Fed’s portfolio every month. Until recently, investors expected the Fed to let its portfolio slowly shrink in this fashion. Tuesday, though, a Wall Street Journal article suggested that Fed officials are considering a plan to replace those securities with new purchases to further stimulate the economy. Investors are divided about whether recent economic data has been weak enough for the Fed to decide to do this. It may be addressed at the August 10 FOMC meeting. While the demand created by this action would be small compared to the original MBS purchase program, it would further support low mortgage rates.


Skip Schenker’s “Fund My Remodel” Contractor Spotlight: Orange County, CA Fine Finish Carpentry Firm “Woodwork Solutions” Completes Incredible Entertainment Room Renovation (Video)

6 08 2010

Scope of Work:
Floor to ceiling recessed panel wainscot, coffered ceiling, 2 piece crown moulding, custom entertainment wall, fireplace mantel, recessed panel columns, recessed panel hidden door, custom paint and audio/video system.

This project was a collaboration of old world traditional design. The Woodwork Solutions Team did a complete remodel of Vicky and John Higgins grand family room. We started with floor to ceiling recessed panel wainscot, and a 12″ dropped coffered ceiling with 2 piece crown moulding. This also included 6″ can lights within each square. To display their art work and family pictures, we built them a 17″X8″ custom entertainment wall with lots of shelving, this entertainment wall consists of matching cabinets on each side of the custom wood fireplace mantel. As the centerpiece of the room, this mantel was designed with recess panel columns and triple stacked mouldings. To the right side of the cabinet is a “hidden door,” which resembles the recess panel wainscot that is throughout the room. Behind this hidden door houses the complete house audio system and video system-installed by Troy Vallin and his team at Custom Installations. The Higgins wished to also modify the step at the room entrance, so we accomplished that by removing the stair rail and built a longer step for a more grand appeal. Dave Monaco and his team installed the granite foe the step, bar top, and fireplace surround. Foe the finishing touch, we finished the bar, entertainment center, and crown moulding within the coffered ceiling in an antiqued cream color. the recessed panel floor-to-ceiling walls were painted in a brown satin to finish off this magnificent transformation. We thank the Higgins family for the opportunity to be apart of this beautiful room remodel!