Buy/Sell Now or Wait? With the November election finally(!) on the horizon, at least some Buyers and Sellers are trying to decide whether market conditions — and by market conditions, most observers mean interest rates — will be more or less favorable once U.S. voters have spoken. The dilemma: whether to act now or wait....Read More
Flight to Safety Keeps a Lid on Interest Rates The flip side of a (very) rocky stock market so far this year is cheaper mortgages for home buyers. That’s because investors seeking safety pile into bonds. That drives bond prices up . . . and interest rates down (bond prices and interest rates move inversely...Read More
Making the Mattress Look Good “Investors are willing to lose a little to make sure they don’t lose a lot.” –“Accentuate the Negative”; The Economist (1/24/2015) Could today’s already infinitesimal interest rates ever actually fall below zero, to the point where mortgages sport negative interest rates? My knee jerk reaction is, “Of course not! That...Read More
Housing Market – Stock Market Linkage Economic observers — and readers of this blog — know the dynamic well. Namely, melting stocks precipitate a flight to safety (bonds), which drives down interest rates . . . helping home sales (at least in the short run). In fact, just such a sequence played out this week,...Read More
Addicted to (Spoiled By?) Ultra-Low Interest Rates Two years ago, when the shortage of housing inventory in the Twin Cities first became apparent, the leading theory was that underwater homeowners literally couldn’t afford to sell.* Now that local housing prices have rebounded significantly, that theory . . . umm, holds less water. With current Twin Cities housing inventory the...Read More
From (Big) Premium to Discount Three years ago — give or take — there was a HUGE premium for a jumbo mortgage (over $417k in most markets) relative to a conforming one. As I recall, the spread was something like 150 basis points. Translation: when conforming rates were 4%, jumbo’s were at 5.5% — assuming...Read More
