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Old 10-14-2008, 07:33 AM
 
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Can anyone here give insight on why the average a 30 year fixed mortgage rate went from 5.80% last week to 6.23% now?

Where is this headed? Why?

Moderator: I realize there's a mortgage forum, but want to know about the financial forces causing this, in view of the massive bailouts and market swings taking place. Thought this forum could give better big picture answers.
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Old 10-14-2008, 08:40 AM
 
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It's influenced by the 10-year treasury note, the yield on which rose by 0.43 percentage points over the last 5 business days. It's up another 0.15 points tentatively today.

^TNX: Historical Prices for 10-YEAR TREASURY NOTE - Yahoo! Finance
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Old 10-14-2008, 09:07 AM
 
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Is there any projection or way to predict where 10-year treasury notes are headed? Should I expect 7% 30 yr mortgage rates soon?
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Old 10-14-2008, 09:15 AM
 
Location: West, Southwest, East & Northeast
3,446 posts, read 4,737,022 times
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Quote:
Originally Posted by cohdane View Post
Is there any projection or way to predict where 10-year treasury notes are headed? Should I expect 7% 30 yr mortgage rates soon?
For house prices to correct to fair value (from their artificially inflated prices) the rates must increase...unless the Fed does something stupid [again] and keeps house prices pumped up above fair value.

This may help you understand: Interest Rates should have been 10%-15%
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Old 10-14-2008, 09:39 AM
 
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If you look back at the housing market in the 90's, there was a last bottom in home prices after interest rates rose in 1994 and home construction had recovered (resulting in supply of cheaper homes). I believe it was sometime around 1995 or 1996 in the DC area.

The first decline in the late 80's was due to lax lending practices which resulted in a buildup of foreclosures. Some areas continued to still increase in price during that time. The first bottom occurred as a result of the recession in 1991-1992.
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Old 10-14-2008, 10:27 AM
 
Location: Orlando FL
1,052 posts, read 2,781,092 times
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Quote:
Originally Posted by Kooter View Post
For house prices to correct to fair value (from their artificially inflated prices) the rates must increase...unless the Fed does something stupid [again] and keeps house prices pumped up above fair value.

This may help you understand: Interest Rates should have been 10%-15%
I disagree with that statement. Prices have already corrected significantly to fair value without any change to interest rates. It's all supply and demand, interest rates are only a part of the formula on the demand side. In today's market it's the supply side that is the biggest problem.
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Old 11-03-2009, 08:59 AM
 
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i want to know how i can sign up for one of these houses. to buy
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