by Donna Aldrich, Certified Mortgage Planner, Special to Mermeltown.com  

1 December 2008

To quote an old song, ‘what a long strange ride it’s been,’ and the ride continues. Today, National Bureau of Economic Research (NBER) declared that we have been in a recession since December 2007 which, I’m sure comes as no surprise but the specific date has now been officially determined. That determination indicates that economic activity has been declining since then although the indicators have not all experienced a steady decline.

Meanwhile, the Commerce Department reported that construction spending fell by a larger-than-expected 1.2 percent in October, while the Institute for Supply Management said its gauge of manufacturing activity dropped to a 26-year low in November.

And, Federal Reserve Chair, Ben Bernanke, said that further interest rate cuts were possible but cautioned that there were limits to the impact that such actions could have on the economy in its current state which is expected to remain weak well into next year.

The NBER declaration means that during the 8 years that Bush has been in office, the country has seen two recessions the first being much shorter from March 2001 through November of the same year. And, in turn, that President-Elect Obama has his work cut out for him. Not only does he have a potentially multi-year recession to pull us out of but also 2 conflicts in the Middle East.

So far, he seems to be surrounding himself with intelligent, motivated, bi-partisan staffers including a board of economic experts from outside the government to advise him. This is his latest move to reassure nervous consumers and financial markets that he will bring swift economic relief as president, saying, “I was elected with the charge of getting this economy back in shape. We are going to implement starting Day One when I come into office.”

Let’s hope for our sake that he is wildly successful and that the economy begins it’s speedy recovery in January 2009.

In the meantime, if you have 10 – 20% to put down, good income history and good credit, interest rates have actually improved over the last week. With the conforming jumbo limit being lowered from $729,750 this month to $625,500, now’s the time to get the loans falling into that range done. This morning, the best rate on a 30 year fixed conforming jumbo was 5.5% with no points!

Donna Aldrich is a Certified Mortgage Planner with Guarantee Mortgage.  She can be reached at donna@donnaaldrich.com.