Good Afternoon,
For those of you who did not lock your interest rates yesterday and the day before, now you have to wait and see if they come back down again next week. If you are seeking the best opportunities that become available you need to make decisions at the right time. Right now the 10-year bond yield is up again and rates have followed the upward trend this morning.
Here’s the inside Dripp…
Today the stock market is rallying and the bond market is suffering. We were expecting this yesterday and today, but there is some relatively good news in the short horizon for mortgage rates. Both of the following events may help the mortgage rate market.
Fed Chairman Bernanke’s speech in Wyoming hinted that the credit market issues are not over yet, but the decreasing prices in commodities are relieving some of the inflationary concerns. This will more than likely help interest rates next week.
Also, Warren Buffet commented on the Fannie Mae and Freddie Mac problems today. He thinks they are way too big to fail and that the government will jump in to help at one point or another. Buffet’s words are very respected; in fact he was even approached by some government-sponsored enterprises requesting his help.
Simply Put: Chairman Bernanke hinted to a slight ease in expanding inflationary concerns because of the recent drops in commodities, such as oil. As we said before, inflation hurts the bond market, so if inflation slows down we can see some interest rate improvements. It is still unsure how the Fannie and Freddie mess will affect future mortgage rates, but higher fees have already been stimulated.
A lot of economic news is scheduled to be released next week, so again anything can happen.
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