HOT...OR NOT? Although the heat is on weather-wise in most parts of the US, our recently overheated Stock market suddenly took an icy plunge lower last week. Just as quickly as the Dow had cracked the record level of 14,000, Stocks reversed course and lost 586 points for the week overall. The big cool down was triggered by a few different factors, including several weak Stock earnings reports and continuing concerns about the backlash from the subprime mortgage situation and tightening mortgage credit. And when the mood in the Stock market went sour, it happened fast - Traders and investors unloaded Stocks hand over fist.

Here is the preview for next week. Weekly mortgage update.

HAVE A BAD CASE OF PARASKAVEDEKATRIAPHOBIA? If you suffer from this, the fear of Friday the 13th, then you may have chosen to stay home last Friday...but Stocks got very lucky, with the Dow closing at record highs. This was not the case for Bonds and home loan rates, which could have used a rabbit's foot or four leaf clover, as they were buffeted up and down over the course of last week, and finally settled out close to where they began.

Read on for next weeks forecast in this weeks weekly mortgage update.

WHILE INDEPENDENCE DAY SIZZLED, BONDS AND HOME LOAN RATES FIZZLED...Just like a bottle rocket that turns out to be a "dud" - Mortgage Bonds sputtered and crashed lower last week, causing home loan rates to rise about .125% across the board.

Weekly mortgage update.

* 725 closed in the month of June

June - the start of summer and a "new" real estate market. In June, we experienced a significant increase in residential listings, sub-prime lending fall-outs, and fluctuating interest rates. The real estate market has moved more to a buyers market depending on location and price, and we have seen a large fall-out in qualified first time home buyers. This fall out, in my opinion, is what has caused the real estate market to change. The circle has been broken - here is what I mean- the first time home buys a starter home or first home, this seller then buys their second home, the seller of the second home then buys their third home, the seller of the third home then buys their fourth home. When the circle is broken as in this market with the first time home buyers it affects the whole market. I see the increase in listings as potential buyers if they were able to sell their existing home. Will this correct itself? I believe it will, mortgages will conform to meet buyers needs, wages will increase causing an increase in qualified buyers or buyers will do what it takes to get themselves qualified.

There is great competition for buyers right now in every price range, now is a great time to buy!

Interest rates have risen to 6.50% for a 30-year fixed with no points.

In true form, the Fed chose their words very carefully, saying that inflation had improved modestly, but that a "sustained moderation...has yet to be convincingly demonstrated." But it's their job to be on guard against inflation - so no real surprises there. But on Friday, along came the PCE Index with some hard data on inflation - and it showed that the current year-over-year pace of inflation is down to a friendly 1.9%. Not bad, and within the Fed's desired range of 1 - 2%. So everyone was reasonably happy, no word-eating was required for the Fed, and home loan rates improved about .125% on the week overall.  For next weeks forcast be sure to read on in this weeks weekly mortgage update.

Weekly mortgage update.