Financial Update by Maurice Soussé

Pigs do fly…Amazing. Britain has exited the European Union. This is a landmark historic day with significant ramifications to the financial markets. The world has flown to the safety of the United States Treasury Bill. The close on the 10 year T Bill was at 1.72 and now dwarfed to one of the lowest levels in history…1.55%. Rates are down an .125% this week on the conforming loans with a possible lowering this afternoon. The markets will be slow to change in this time of uncertainty. Although indications point to the economy gaining momentum in Q2, global events could make Q3 growth unlikely. Slowing economy would support lower rates and expectations of a Fed rate increase have disappeared. Traders are now talking about a possible rate cut and rate cut speculation is good for mortgage rates.

Case-Shiller reports that home prices are still rising, with a 5.4% increase year-over-year in April with strong employment and low rates continuing to be factors. Pending home sales were down slightly, the first annual drop in 2 years. However, the drop is blamed on tight inventory rather than a lack of demand in the market. Fannie Mae reports that serious delinquencies were at 1.38% in May, the lowest level since 2008. The normal delinquency rate historically is below 1%.

All of this activity drove me to a great quote from Thomas Edison who said “Opportunity is missed by most people because it is dressed in overalls and looks like work.”