Tuesday, July 28, 2009
Fixed Mortgage Rates Are Climbing Up All Over the United States?
The pressure on mortgage rates in America is mainly attributed to external forces. As many media sources have reported, major players in the US Debt market are still not satisfied with the economical and fiscal measures taken by the American Government. With the outside pressure on interest rates and the future liquidity situation in housing market still looking bleak, the American recession continues to dampen. Long-term Treasury bond rates, which are being closely watched by experts, have doubled recently alongside mortgage rates. The jump in long-term Treasury bond rates, which previously hovered at around two percent, was prompted after Chinese politicians negatively remarked about long-term projections concerning the American economy. These two interlocking factors- Long-term Treasury bond rates and foreign sentiment concerning the progress and condition of the U.S. economy, will play the most effective role in moving mortgage rates as they are considered to be the two most influential forces affecting mortgage rates.
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6 comments:
It is really difficult to forecast what mortgage rates are going to do. I do not think will see any wild swings one way or the other unless something unusual happens in the housing market or the 'glorious' US economy.
Rates are likely to rise. This week, the survey broke down neatly. Half of the panelists believe mortgage rates will rise over the next 35 to 45 days. One-quarter think rates will fall, and the other 25 percent believe rates will remain relatively unchanged (plus or minus 2 basis points).
A couple of things are happening in markets right now and none of them are good for mortgage rates.
1.Home prices are no longer on a steep decline
2.Consumer Confidence is rising
3.The financial system is returning to profitability
Furthermore, Americans no longer have Recession on the Brain like they did last September and October. Back then, the financial crisis was the leading story of every news-related show on TV and in print.
In 2008, mortgage rates benefited from the stock markets' losses. Investors fled risk and parked their dollars in the relative safe haven of the mortgage-backed bond market. Now, in 2009, as the stock market improves, some of those safe haven trades are getting unwound.
A couple of things are happening in markets right now and none of them are good for mortgage rates.
1.Home prices are no longer on a steep decline
2.Consumer Confidence is rising
3.The financial system is returning to profitability
Furthermore, Americans no longer have Recession on the Brain like they did last September and October. Back then, the financial crisis was the leading story of every news-related show on TV and in print.
In 2008, mortgage rates benefited from the stock markets' losses. Investors fled risk and parked their dollars in the relative safe haven of the mortgage-backed bond market. Now, in 2009, as the stock market improves, some of those safe haven trades are getting unwound.
I think the mortgage rates will come down because the economy needs to be stabilized. If US governemnt doesnt do it then it can never come out of this depression.
I agree with Samantha that the rates should come down. But it is highly unpredictable. It will be good for the new home buyers if it comes down.
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