It Was A Dark And Stormy Week for Mortgages

This was a very difficult week.  As most of you know, I’m involved heavily in several other projects besides the Chris Jones Group, though that’s the only one that pays.  Some weeks, the Chambers of Commerce I belong to have unusually heavy demands, and some weeks it’s the American Cancer Society; this week it was the Church and the Republican Party.  Last night I was elected to a post as Legislative District Chair for District 56, so there went the last 4 free hours of my average week.

Always nice to win, though.

Looking at the markets, although there is no good economic news anywhere that I can see, the long bond has dropped substantially the last couple of days.  We’re at 4.33 on the yield, meaning that 30-year rates have risen about 1/8 since I last reported on them.  Roughly, for good credit loans with some down (or equity position), we’re looking at 5.875%, which is still very, very good, but not as good as it has been periodically for the last three years.

Another trend is turning in a positive direction, though, and that’s new construction profits in Utah.  We are working with three different builders at the moment, and each of them is reporting solid margin (15%+) on new construction in the $225-$250k range.  We have also secured an investor that opens the way to doing some 100% investor construction loans, a previous impossibility.  We’d love to work with you on one of those, and right now the market for those projects is very good and improving.

Putting the previous paragraph in English: we can take someone with good credit and a decent job, get him a loan to build a house on spec, guarantee the long-term financing for the project, build the house, and help him sell it for 10% profit (or so).  On a $250,000 house, that would be profit of $25,000.  Net.  If you’d be interested in some of that about the time your Christmas credit cards come due, you should probably email me.

Congratulations to Ray on the glorious triumph of the Colorado State Rams.  Since he does not remember his Alma Mater’s fight song, I have thoughtfully linked to it here.  I’m a nice guy.

Last week’s predictions were not so accurate, which is what tells me I have what it takes to be an economist, or perhaps a weatherman.  To keep in practice, I’ll make some more:

BYU beats SDSU 37-20
Boston and NY finish the season tied with Cleveland, and we get two one-game playoffs.
New Mexico beats TCU 31-20
Michigan beats Michigan State on a last-second field goal
No major news commentator gets any sort of clue what Bill Bennett actually said

If you get some time, please read Peggy Noonan’s excellent column on how Katrina destroyed much more than New Orleans.

Have a good weekend.  Please.