Coldwell Banker Premier Realty

Mortgage Interest Rates


Not where we thought they would be, thanks Europe...
Posted: May 24, 2010 by John McClelland

While most of us thought mortgage interest rates would head higher after the Fed completed its program of buying MBS, rates have actually gone in the opposite direction. Well, our expectation was logical but what we did not expect was the Sovereign problems in Europe. A flight of monies out of European bonds has found itself in U.S treasuries. The mortgage market, while subject to it's own considerations such as risk pricing and supply/demand, is linked to treasuries in a second hand way. The result is a decline in mortage rates.

This is good for homebuyers in this market. While the tax credit for first-time and move-up buyers has ended, low rates, combined with 1995-2000 era pricing, makes housing look more attractive.

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