Time to update your application with me and crunch the numbers on a refinance.  Remember that a refinance can also be utilized to pull cash out of your property to pay for various items, e.g. college tuition for your children or grandchildren, wiping out credit card debt or auto loans, a down payment on another property, investing with your financial planner, etc. 

Please note that the interest rates quoted below are based on over 26 different variables and are subject to change at any given time, depending on current market conditions and borrower’s ability to qualify. 

Thank you for your continued business and referrals!  Please see commentary, current rates and article below… Have a great Memorial Day Weekend!  ~ Rob

It’s official! No, not that Summer’s here, although the unofficial start of Summer comes with Memorial Day on Monday. Rather, it’s fairly clear that the economy has officially downshifted from a reasonable growth rate at the end of 2010, and present trends don’t suggest any imminent uptick.

Of course, a stumbling economy brings lower mortgage rates, so even if few are interested in buying homes, at least some folks my get a new opportunity to refinance the ones they own.

Forecasts called for the re-reading of the first quarter Gross Domestic Product report to show an upward revision, from the meager 1.8% annualized rate it revealed last month to perhaps 2.2% for the period. That failed to occur, and the preliminary GDP estimate remained at just 1.8% for the first quarter of 2011. Keeping in mind that the first quarter ended some two months ago next week, and rummaging though the various economic indicators which have become available over the last eight weeks, it seems that the second quarter has not improved much (if at all) on that puny pace.

After struggling mightily to crack below the 400,000 mark earlier this year, weekly unemployment numbers have now remained above that level for the last seven weeks, so improvement in the labor market is still more of a nope than a reality. The 424,000 new applications filed at state windows during the week ending May 21 was a 10,000 turn in the wrong direction. Certainly, there are explanations – lingering effects from the Japan disaster, jobs dislocated by flooding or tornadoes – but the numbers tell a tale of too many folks losing jobs for whatever reason and for whatever period of time.

Of course, folks without jobs don’t buy homes. It would appear that even folks with jobs are staying away, too. New Home Sales did bounce 7.2% higher in April when compared against March, but the 323,000 annualized rate of sale was certainly nothing to get excited about, since something on the order of triple that would be closer to normal. Inventories has fallen to just 6.5 months available, and the 175,000 actual units on the market is the lowest figure in almost 50 years. Eventually, when demand for new homes does return, a strong spate of homebuilding is to be expected. Here’s hoping it comes sooner than later, but 2012 seems to be the earliest at this point for the turn in homebuilding.

Optimism among consumers is returning… sort of. The weekly Bloomberg Consumer Comfort Index rose a single point during the week ending May 22, “climbing” to minus 48.4 from minus 49.4 a week prior. Among other things, high gasoline prices and tough labor markets are keeping moods quite dark. On the other hand, the University of Michigan Surveys of Consumer Sentiment points to hoped-for brighter days ahead. Their indicator added 4.5 points during May to move to 74.3 for the month and slowly taking back a 10 point swoon of a couple months ago. However, the rise was all predicated on better times to come, since the ‘current conditions’ portion of the report was just about flat.

So far this year, the recovery has failed to meet expectations. In the coming weeks, the Federal Reserve will step away from just one program of extraordinary support, and there are divided opinions about what will come next. Will rates rise or fall? Big bets are being placed on both sides, no doubt. Will the economy falter further, requiring some form of Quantitative Easing III? Some observers are suggesting that this can’t be completely written off at this point. Whatever the case, we will move away from the certainty of the Fed’s involvement and into a less-certain period, at least for a while. At present, interest rates are sliding gently as things continue to show signs of slowing. More uncertainty brings risk, and risk usually brings higher interest rates.

As to what happens, we’ll need to wait and see. For now, mortgage rates are even more favorable than they have been at any time in 2011. If you can, it might be a good time to get your purchase or refinance done reasonably soon. Next week, we get both end-of-the-month and first-of the-month information, including the employment report. It’s a holiday-shortened week, and there doesn’t seem to be a likelihood of a big economic surprise on the horizon, so mortgage rates will probably continue to drift.