Home Loan Rates Settle into New Range

Despite yesterday's late sell off, the secondary market and mortgage rates have improved this morning re-establishing our new range. With that said this will be tested based on the international markets starting to find their foothold. There is talk over the pond that the Euro is stabilizing. These recent gains resulting in the lower rates are primarily due to the uncertainty of markets overseas which brought investors to our long term markets. Should the Euro situation work itself out we could see a retraction. Although this is on the back of my mind, it is not my real fear.


Moving forward my real fear is inflation. The Fed is meeting today and eventually one of these meetings will result in their pointing out an underlying concern about inflation and when that happens rates will rise, and they will rise quickly. Inflation is our nemesis when it comes to offered rates.

Here is this mornings graph illustrating five days of trading and our new range. Some agents out there may be wondering why I am so focused on interest rates right now. After all the last five posts or so have been about rates. Point in fact this is a major selling point right now that you should be confident talking about with your clients. Of course I am happy to field the bulk of questions addresses rates and finance markets for you, but that does not negate the fact that these low rates support a buyer or a seller accepting an offer. A buyer, so they can lock in these low rates, a seller because an offer may be taken off the table as rates rise and borrowers begin to have more and more trouble qualifying for home loans (higher rates after all mean higher monthly payments which they must qualify for).