The Week in Review:
When Bernanke speaks, the markets listen (and react!). Fed Chairman Ben Bernanke announced the Fed would begin to taper the bond purchase plan this year and likely end the program by mid-2014. The markets were expecting comments about the future of the stimulus plan but were not prepared for such a clear exit strategy. The announcement shocked stock and bond markets causing a three day selloff. Home mortgage interest rates ended .375% to .50% higher.
What to Expect:
This week, it’s still all about the FED. The announcement is over but the shock wave will continue. This will be a volatile week. I fully expect home loan rates to change several times during the day. There is no indication the underlying mortgage-backed securities market will rally anytime soon. Lock when you can and don’t risk floating for a better rate.
Which option do you like best?
1) Super low interest rates, high unemployment, a crashing housing market and a dysfunctional economy, or
2) Reasonably low rates, improving employment, a red hot real estate market and an economy that can support itself without help from Uncle Bernanke?
Sometimes you have to put it all in prospective. It’s a great time in the economic cycle to invest in real estate. Don’t wait for rates to come back down; it may not happen.
For transactions closing in:
Next 15 Days: Lock
Next 30+ Days: Lock. The risk is too high to float.
Courtesy of:
Bob Bregitzer
Southeast Mortgage
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