Today the US dollar rose in the biggest one day gain
since 2005, a welcome move on Wall Street. Last Friday’s
395 point DOW sell off came in response to a negative
jobs report and soaring oil prices that point to a looming
recession. Oil prices dropped today in response to
the US dollar’s gains. This week opened with lackluster
index movement for Wall Street and more write downs
by major financial players. Last night Ben Bernanke’s
speech brought a shift in language regarding inflation that
spooked investors further. Today we’ve seen bond pricing
deteriorating, which translates into higher mortgage rates.

But let’s keep this in perspective! Mortgage rates are not
much higher this year than years past, and although we
are certainly in a credit crunch, it is not as bad as ones in
the past. Remember the 1980’s when mortgage rates went
to 20%? We’re a long way from conditions like that and
thankfully, our Federal Reserve board seems poised to
act quickly to stabilize the market further. There are also a
number of analysts saying that if we are in a recession, it’s
likely to be a small one.

Important legislation is on it’s way to becoming law and
changing the disclosure of mortgage closing costs by
lenders. A lot of mortgage originators are fighting the
proposed changes… but at Avatara we applaud most of the
proposal. Why? Because we already disclose in a manner
that matches the proposed changes. Yup. Our business
model discloses YSP rebates and credits them to our borrowers
already, and we are careful to always be accurate
on our Good Faith Estimates of Closing Costs so there are
no surprises at closing. This is simply a fair and honest
way to do business!

Pending sales of existing homes rose again in April by
more than 6% as buyers pounced on advantageous pricing.
Locally we’ve seen a steady increase in buyer interest
and sales for over two months. Well priced homes are getting
lots of attention from buyers… and with interest rates
still low, this spells sustainable purchases that are wise investments.
It’s good to always remind clients that a home
is also an investment, and that in this area of the US it can
yield as much as stocks or other investment vehicles. This
approach can also set you apart from other Realtors.