Will the mortgage rate rollercoaster continue?
Week in review:
What in tarnation is going on here? Unless you were living under a rock last week, you saw that the US government bail out our financial system. First, they gave insurance giant AIG an $85 billion lifeline, announced they would guarantee money market funds to avoid a “run on the bank”, revealed they would create a marketplace for illiquid mortgage debt and banned short selling of 799 different financial stocks.
The stock market loved the news and rallied at the end of the week. As usual, the stock market rally resulted in home loan rates ending the week about .125% higher than they started.
What to Expect:
While the events of last week are great news for our financial markets, the initial effect will most likely cause long-term rates to increase. The moves to make capital easier to acquire and stimulate the economy can be viewed as inflationary. Also, commodity prices, like gasoline, increased dramatically at the end of the week.
We still feel the Fed stepping in to save Fannie and Freddie will contribute to lower rates in the long-term. However, we’ll have to wait and see because there is so much volatility and uncertainty in the financial markets.
Breg-ometer:
Next 7 days: Large swings, possibility for increase in rates
Next 30 days: Neutral, the markets are still digesting the news
Next 90 days: Neutral
Courtesy of:
Bob Bregitzer
[tags]Smyrna Mortgages, Vinings Mortgages, Atlanta Mortgages[/tags]