Posted on 10/18/2008 11:35:09 AM PDT by CaptainMorgantown
Mortgage rates skyrocketed this week as Wall Street tried to discern the ever-shifting contours of the Great Bailout. The benchmark 30-year fixed-rate mortgage rose 54 basis points to 6.74 percent, according to the Bankrate.com national survey of large lenders.
(Excerpt) Read more at bankrate.com ...
Get LIBOR down 80-100 bps from here, and you will see the mortgage rate offers drop as if by magic. Patience, m'friend, patience.
One other thing of which you might not be aware. Any number of mortgage products have rates directly tied to LIBOR...which fact, needless to say, has not worked to borrowers' advantage in recent weeks.
Sky rocketing, ROFLOL, money has to be worth something, are inflation will eat your lunch, a rate of 7 to 7.5 is a good mortgage rate. And was judged so for years. This free lunch interest rate needs to be put out to pasture.
This isn’t bailout related. For some odd reason the Treasury added extra 10 year bonds to their last auction at the last minute. It was unexpected extra supply and the yields went up. Fixed rate mortgages are tied to the 10 year bond. Some speculate that the Treasury wanted to make bonds less attractive as a safe haven so more money would go elsewhere. In any case it looks like a stupid move.
People have short memories. Look up the Jimmy Carter years if you want to see high interest rates.
When t-bills are paying a better return wouldn’t more people be buying them?
The economic crisis can’t end until houses stop falling in price, which can’t happen until inventories come back to earth. Higher interest rates and tighter credit mean it will take longer for housing to bottom and for this crisis to end. Higher interest rates make it more difficult to clear out the existing inventory and prolong the crisis. It will take a good long time to clear out the housing overhang anyway, but higher rates will only increase that duration and draw out the economic crisis.
also, a lot of investors went into Treasuries of all maturities for security during the stock market decline, and have started selling out of them to put money elsewhere. this temporarily moves rates upward.
Good Lord...people have dog memories, don’t they? panic at 7% </snort...magritte
**** The benchmark 30-year fixed-rate mortgage rose 54 basis points to 6.74 percent****
Is this some kind of joke? I was paying 7.9% on a VA loan back in 1977.
A couple of years later the lenders were begging me to refinance at a “low” 12% in the last CARTER years.
7 to 7 1/2 % is a very good interest rate on any mortage and should keep those 1st time homebuyers purchase the home they need instead of going for something they WANT, just to keep up or better that the JONES.
For later...
Not only have the foxes in the hen house been stealing themselves, and the tax payers, blind, but they completely ignore the saving incentive. A pass book savings account should have some sort of interest earnings.
I didn’t take Econ 101. Explain what you mean or STFU.
http://en.wikipedia.org/wiki/Supply_and_demand
Don't pay any attention to those real estate con-jobs about current investment, the bottom is still one are two years away. The other day I read that there had been 11,000 homes foreclosed in Gwenette county GA. this year, that is a drop in the bucket for the current 10 million unsold homes and the other few million lots developed but not built on. The inventory of unsold homes is actually increasing due to foreclosure.
I completely agree with you, but mortgage rates are part of “affordability”. Homes have to come down in price but affordability will take longer, homes will sell more slowly, and inventory will take longer to clear if homes come down in price and mortgages go to 15% than if homes come down in price and and mortgages stay at 6%. This isn’t obvious?
You might answer, “homes just have to go lower still if lending rates rise”. Well, yes, which will require longer to sell off inventory, which will result in more foreclosures than if the inventory is reduced faster, and which will hit the economy harder. This isn’t obvious?
If you can buy a house much cheaper than when the rate was under 6 percent, is that not a wash? You can always refinance if the rate drops.
I think this is good. Keeps people who cannot really afford a house away. We don’t need anymore of those folks.
sw
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.