Mortgage Rate Update – Week of June 1, 2009
posted in Mortgages, Smyrna Vinings Real Estate |Welcome back!
The week in review:
Wow! The financial markets are so unpredictable and volatile right now. Rates went up .375% to .50% in just a few days.
Here is the perfect storm that hit quickly:
1) Financial markets began to wonder about the US Government’s ability to repay its record debt obligations
2) The Treasury sold a record $162 Billion of US debt last week
3) Consumer confidence rises
4) NABE saying recession may end in 3rd quarter
5) Several big names in the news talked about inflation being a factor once the economy turns around
So what happens from here?
That’s a tough one but here it goes: The markets are known to overreact and they definitely overreacted last week. The big unknown question: Is there enough demand to want to buy all the debt our Government is offering? Looking forward, the Fed still has availability to purchase substantial amounts of mortgage-backed securities. We should improve from here. Will we get back to rates below 5%? Don’t know.
For those who are waiting for rates to go lower than we have seen over the last couple months, let this be a wake up call. Sub-5% fixed rates are something we’ll see possibly once in a lifetime. Take advantage of the rate environment before it’s gone.
Breg-ometer:
Next 7 days: Choppy waters ahead – large daily fluctuations likely
Next 30 days: Would expect rates to improve from recent overreaction
Next 90 days: Could the recession really be over? We might see rates on the rise.
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