Higher Interest Rates to Come?

August7

 Over the last 7 business days, the Bond Market (where Mortgage-Backed Securties are sold) has taken a significant drop.  Not quite as big as the drop that followed Memorial Day Weekend, but it seems to be heading in that direction.  As Mortgage-Backed securities (MBS)decline in pricing, rates tend to go up.  Around Memorial Day, the Federal government slowed down its purchases of MBS, which earlier in the year was artificially propping up the pricing and helping rates.  Plus, there started to be an over-supply of new debt being sold.  In simple terms, all these stimulus programs bring debt for the country.  That debt is sold on the Bond Market.  When there is more to sell that there are buyers, the basic supply-and-demand rules take effect.  Too much debt to sell equals lower price which means higher interest rates!  This may continue as the economy is showing signs of recovery.  Today’s jobless rates came in better than expected and some sectors are showing profit gains.  So, it’s a mixed bag of news, as our economy recovers we may experience the pain of higher interest rates for homes.

About the Author | Janeese Jackson

My job is service...service to you and your real estate transactions! How can you benefit from my 25+ years of experience and expertise? What can I offer to make the process more productive? * Current information on available housing...comparative and competitive market pricing and analysis * Daily involvement in the local real estate marketplace * Thorough, comprehensive knowledge reflecting years of helping others complete their real estate business * Extensive network of professional resources to make the process as smooth as possible My commitment is to you! Being available to you...returning your calls...answering your questions...addressing your concerns...respecting your money...matching your timeline...meeting your expectations...helping accomplish your real estate goals!!

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