RSS
Home
With inflation fears aside mortgage rates should improve
Print
Email
RSS
Subscribe
.jpg)
Inflation fears drove mortgage rates up.
Recently it seems as if inflation fears had driven mortgage rates up. That was bad news for the treasury whos big bond auctions aimed at keeping mortgage rates at record lows and ultimately getting the housing market moving again controlled long term home loan interest rates for the first 6 months of the year.
The Los Angeles housing market is moving at a snails pace. Even with the record low mortgage rates over the past few months short sales and bank owned properties made up a large chunk of the sold homes. With nightmares of big time inflation and 6-7% mortgage rates in our future news channels last week had a field day debating whether signs of the turn around are for real or if the worst is yet to come.
Then came the announcement by the Fed last Thursday that inflation does not look to be an immediate headache. They are optimistic inflation could be headed off in the long term as well. That's great news for the economy and already bond yields have eased to leading to an improvement in 30 year fixed mortgage rates. It's very possible that as long as inflation does not dominate the airwaves investors confident in the US dollar will continue to invest in long term bonds and rates could gradually decrease back to the sub 5% levels we've seen of late.
The Obama administration announced an expansion of their refi program allowing up to a 125% LTV on first liens on loans backed by Fannie and Freddie. This is their most aggressive move yet to fight foreclosures and hopefully keep these distressed homes off the market. A combination of Obama's refinance program, lower rates, and bargains to be had may finally get the housing market moving as long as inflation remains on the backburner.
Related Articles:
Comments
