Edmonds Undressed

Mortgage Backed Securities… What the Fed’s Purchases Mean to You

Emonds Pink House

You’ve probably heard that the Fed is buying up billions of dollars worth of Mortgage-Backed Securities. But how does this really impact home loan rates and your mortgage?

Basically, the Fed’s actions provide a demand for Mortgage-Backed Securities, which should help keep the ceiling on home loan rates from moving much higher in the foreseeable future. That’s good news for home buyers who are looking to purchase a home at a bargain price, as well as those who can benefit from a refinance.

However…the Fed’s actions do not necessarily mean home loan rates will move significantly lower.

It all depends on which Bond coupons the Fed purchases. If they purchase higher rate coupons–as they have been doing–their continued purchasing will likely keep a lid on rates, but won’t necessarily push them significantly lower.

The fact is, rates are within inches of all-time historic lows, so don’t wait to miss a great opportunity to purchase the home of your dreams, or get more money back in your budget by a smart refinance.

With a short conversation we can talk over the options, so you can rest assured that you’re making smart decisions on your home financing. We are the The Cobbin Group agents who can decode the market for you. The Cobbin Group.com of Edmonds Wa

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Edmonds Real Estate Corner

Hey don’t invest in real estate now! Why you might save money later if you wait until rates go up not!  Just when you thought it couldn’t get any better to own a home in Edmonds it did. Your better off now than this time last year to purchase a home in Edmonds Wash town by the sound the average cost for a home in this bedroom community as of last month was $349,000  that’s a first time buyer price. Rates are going to go up according to  economist.

The first reason is that the markets are currently in a very positive mood about the near-term future of the economy. Manufacturing seems to be turning up along with employment numbers and consumer confidence. Personal income is growing slightly. The numbers continue to please investors, and the stock market has finally gotten into the spirit of the higher numbers again.

A better future for the stock market and the overall economy generally means that interest rates begin to rise, as the stimulus of lower rates gives way to the foot-gently-on-the-brakes of higher rates. Though analysts assure us daily that inflation won’t begin a serious rise for many months, there is still a consensus that an improving economy will cause the Federal Reserve to cease its support of lower interest rates, and perhaps even raise the fed funds rate well before it was recently expected to.

The second reason that 10-year note rates are rising so convincingly is closely related to the first. As interest rates climb, existing Treasury notes providing lower yields to their investors become less valuable. Those investors, therefore, very often raise rates further by selling off their Treasury securities when they become convinced that the interest rate trend is turning and that their holdings are about to lose value.

We have noted a narrowing spread between the 10-year note and the 30-year average mortgage rate, suggesting that mortgage rates may be about to rise. Even more significant is the spread between 2-year notes and 10-year notes, which makes up what is called the “yield curve.” A year ago, that spread was 1.27%. Now, though, the spread has widened very significantly to 2.81%. (Before the recession, the yield inverted rather prophetically, with short-term rates lower than long-term rates, a condition that sometimes precedes an economic downturn.) So as I said wait before you purchase it could cost you not!!  The Cobbin Group /Keller Williams Realty google it and will decode it!

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Edmonds Chamber of Commerce Photo’s

Hope you enjoy the photo’s from Edmonds Chamber of Commerce events this past year. We are looking forward to 2010 in Edmonds Wa. If  you would like to join us in the up coming year contact the Edmonds Chamber web-site or call our office (425)670-1496 courtesy of  The Cobbin Group & Edmondsundressed.com

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Happy New Year

Edmondsundressed would like to wish all  of Edmonds Washington a very Happy New for 2010. Thank all for your support this year and I hope that the new year is prosperous. Real Estate in 2010 don’t buy ask me why! I’ll tell you what, when, where and why. Talk at you all next year The Cobbin Group.

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Edmonds Insight of the Day

“When you have a purpose in life, a vision for what you want to achieve, and know why you want to achieve it, work becomes fun, and the time you spend working seems to just whizz by.” Edmonds Wash

Clayton J. Moore
Financial Expert

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Edmonds Insight of the Day

“When you focus on something with a lot of passion, it makes it happen even faster. Make it a great day!!

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The season of giving

As the holiday season approaches, finding that perfect gift for a loved one or friend becomes a mission. Sometimes the best gift is one that comes without a bow but makes a positive impact on a needy neighbor. This year, consider making donations of time or money, given in the name of those on your gift-list, to benefit organizations serving south county.

Special dates:
Dec. 12–14. The Sing from the Heart program helps food banks. Anyone from classical quartets to a pair of friends willing to share their musical talents can brighten the holiday season while helping local food banks. Sing from the Heart will be held Dec. 12 through 14 at TOP Food stores, including the Edmonds location. The store will make a donation of $50 to local food banks for each hour a group presents holiday music. Register in advance for a performance time at the guest services counter of the store.

For children and families:

Clothes For Kids, 16725 52nd Ave. W, Lynnwood, WA 98037, expects to serve more than 4,000 Snohomish County children in need this year by providing free quality wardrobes. Urgently needed is winter clothing. For additional information, times to drop off donations or to make a financial donation, go to www.clothesforkids.org or call 425-741-6500.

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Holiday Bazaars & Fairs, In Edmonds Wa

Christmas Flair Craft Boutique: Noon-7 p.m. Friday, Dec. 4, 10 a.m.-5 p.m. Saturday, Dec. 5, 23rd annual event features ornaments of every description, wreaths, jewelry, culinary delights, gift baskets and other artisan items, at ArtWorks, Second & Dayton, Edmonds. Portion of the profits benefits Edmonds School District scholarships.

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Edmonds WA US Swimming Record Holder

8Th grader Kayla Wheeler born with one arm and no legs swims her heart out practicing at the Harbor Square Athletic Club in Edmonds WA.  Born with one arm, and no legs, Kayla, 13, eighth-grade, balances her daily life while preparing to compete for the 2009 International Paralympic Commitee (IPC) Swimming Short Course World Championships Team. Hat’s off to Kayla you go girl!!  Enterprise/CHRIS GOODENOW

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Tax credit spurs big surge in sales in Western Washington

Hey Edmonds, Heads up the market is picking up. Credit the tax credit and its impending expiration deadline for a surge in home sales last month. Members of Northwest Multiple Listing Service reported a 63 percent jump in pending sales during October compared to the same month a year ago, a gain many brokers attribute to a tax credit that is set to expire at midnight on Nov. 30. and we as active agents can feel the the buzz. 

Every county except Okanogan reported double-digit gains in pending sales (mutual acceptance of an offer). Collectively, NWMLS brokers notched 7,235 pending sales during October. A year ago, they reported 4,445 pending transactions.

“As anticipated, October saw a surge in home sales thanks to the federal tax credit. The hope of the real estate industry is that the credit will be extended until there is more equilibrium within the economy and the housing market can stand on its own two feet. 

The new figures from Northwest MLS show continued signs of some stability in the market and improving consumer confidence. Inventory is at its lowest level since December 2008, and the year-over-year price decline, at 7.2 percent area-wide, is the smallest drop since June 2008. 

Brokers added 9,344 new listings of single family homes and condominiums to inventory during October, the fewest number since December 2008 when the area was experiencing record snow accumulations. At month end, there were 38,159 active listings in the NWMLS database, a drop of 17.4 percent from the same month a year ago. At that time, the inventory included 46,189 residences. 

Statistical Summary by Counties: Market Activity Summary – October 2009

4-County Puget Sound Region Pending Sales (SFH + Condo combined)
(Totals include King, Snohomish, Pierce & Kitsap counties)

 For the four-county Puget Sound area (King, Snohomish, Pierce and Kitsap), inventory has shrunk 20 percent since twelve months ago. The selection of single family homes (excluding condominiums) in the four-county area is down 22 percent.

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