Lending Landscape - November 1, 2007

It's been an interesting week in the mortgage business. Last week, the nation was waiting for third quarter results from the nation's largest lender, Countrywide. The company reported a significant loss, but held out hope for the near future and predicted a return to profitability as soon as the coming quarter and throughout 2008. If this outlook is correct, the future is promising for both the company and potential borrowers.

Yesterday, the Federal Reserve Board lowered interest rates for short term loans by .25%. Initially, long term rates rose, but have recovered completely today. Compared to last week, 30 year rates are at a six month low.

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.26 percent for the week ended Nov. 1, down from 6.33 percent last week.

The 30-year rate has not been this low since the week ending May 17, 2007.

Last year at this time, 30-year mortgage rates averaged 6.31 percent.

In addition to rate concerns being a drag on the real estate market in some parts of the country, the availability of mortgages has become a concern nationally. Today the Federal Reserve eased some of those concerns by injecting $41 billion of additional money to the nation's lenders.

The foreclosure problems hampering some parts of the country have left Utah behind for now.

New home buyers are in a position where rates are the lowest they've been for several years, builders are offering discounts unavailable for five years and lenders are searching for borrowers. In my opinion, the landscape looks pretty good right now for new home buyers in Utah.