30 Year Fixed Rate Mortgage at a Cost of One Point: 4.875%*
Consumer Confidence is up! New Home Sales are up! Durable Goods Orders are up! Normally all this “good news” would send the stock market up too, and the bond market down – resulting in higher mortgage rates. The stock market, however, was unimpressed because New Home Sales and Durable Goods Orders are only up month over month. They are down compared to last year. In addition, Home Sales have been so poor and prices so low that it is hard for them to stay that way. Just like when you snap a rubber band it has a bounce. Home sales prices will snap back to a place closer to their real value. We can see this happening now.
What I think impressed the bond market was the fact that there was significant demand (other than our own Government buying its own debt) at yesterday’s auctions of government debt. This is good news for the real estate industry because it signals continued lower rates, as the market still values Government Debt. When we see bond auctions with no buyers other than our own government, we all need to get nervous.
For more information on East Bay Real Estate visit my website, www.billfletcherhomes.com