Back to 5%? The good news on mortgage interest rates? After a steep climb the last two months or so, to around 5.5% on 30-year mortgages, they’ve now fallen back closer to 5%. The bad news? The reason is that the latest batch of economic news — unemployment, economic activity, the housing market — shows...Read More
Mortgage Prediction: More Red Tape Clients know that I demur when asked where I think interest rates are headed. If Ben Bernanke, Chairman of the Federal Reserve, doesn’t know with a high degree of confidence — what chance does anyone else have? That said, here’s one major development that’s easy to predict: there will be...Read More
Adjustable Rate Mortgages the Missing Link What about Greenspan’s argument that he only controlled short-term rates? And that short rates became decoupled from long-term rates in 2002? Nonsense, says [Stanford Professor John] Taylor. Surely the existence of adjustable-rate mortgages (accounting for about one-third of mortgages starting in 2003) linked the mortgage market and short-term rates....Read More
Mortgage Rates Tumble In a surprise, [The Federal Reserve] dramatically increased the amount of money it will create out of thin air to thaw out the still-frozen credit markets that have cramped lending to consumers and businesses alike. Indeed, the immediate effect on the bond markets was striking, with prices rising and yields dropping sharply...Read More
“Yeah, That Will Work” Department I’ve been on a (very) brief family vacation — Duluth water park and puppy scouting — and returned to lots of mail, mostly business-related and bills. Including one from a large bank where I have had a credit card account — and several other accounts — for almost a decade....Read More
Interest Rate Level as Regulator Valve Anyone in the market for a new mortgage — or trying to refinance an existing one — can attest to how volatile interest rates are today. Certainly, one key ingredient is the unprecedented uncertainty in the credit markets. However, another, more recent factor is understaffed lenders. According to local...Read More
