Mortgage rates took a large hike yesterday and have come down a bit today. It is important to keep an eye on rates becasue they will tend to respond to economic news. In general good news makes higher rates. Higher rates make houses more expensive to buy because even though the price of the house may not rise, because most of us need a mortgage, when rates rise our buying power declines.
For those who are waiting for the market to bottom out my opinion is that you are already too late. Rates are going up and home prices are unlikely to decline a whole lot more. I think there will be a rush of buyers this spring as the public begins to figure out that they miss the boat entirely as rates go up...which they will. You can take that opinion to the bank!
Showing posts with label Mortage Rates Update. Show all posts
Showing posts with label Mortage Rates Update. Show all posts
Thursday, December 16, 2010
Wednesday, August 26, 2009
East Bay, Berkeley, Oakland, Emeryville Real Estate Market Update: Mortgage Rates
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
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
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