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Jumbo mortgage rates and conforming rates have come down but are on the verge of a potential upswing as the bond market suffers.

In southern California we are experiencing a surge in home shopping activity. Many people are making multiple offers on the great deals that are available.

Lending standards have eased up a bit and are much improved over the beginning of the year. This is also helping to fuel the summer rush.

New home sales unexpectedly rose 3.3% in April, the first increase in six months, the Commerce Department said May 27. As a result, the inventory of unsold new homes fell slightly to a 10.6 months’ supply versus the 11.1 months’ backlog recorded in March.
The Commerce Department further reported that the median price of a new home sold in April rose to $246,100, up 1.5% from April 2007. In a separate report, however, the Standard & Poor’s/Case-Shiller Index showed existing home prices falling 14.1% in the first quarter of 2008, compared with a year earlier, the biggest year-over-year decline since the index began in 1988.
For the week ending May 29, interest rates on 30-year fixed-rate mortgages rose to an 11-week high, Freddie Mac said.
More mixed economic news came from the industrial sector. Orders to U.S. factories for durable goods — those expected to last three or more years — dropped 0.5%, dragged down by big declines in demand for commercial aircraft and autos. However, excluding transportation, orders rose 2.5% in April, the biggest gain in nine months. Orders for electrical equipment and appliances surged 27.8%, the biggest increase on record.
Another boost for the economy came on May 29 when the Commerce Department upwardly revised first-quarter gross domestic product or GDP — the total tally of the nation’s goods and services — from its previous estimate of 0.6% to an annual rate of 0.9%.
Finally, despite the government’s sending out billions of dollars in stimulus checks, consumer spending nudged up a small 0.2% in April, half of March’s increase, the Commerce Department said May 30. Personal income also edged up 0.2% in April, again half of March’s 0.4% increase.
This week, watch for the May unemployment report due out on June 6.

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