Well, what was seen has a positive move has now hurt mortgage rates. Why? Because companies and individuals are pulling money out of the bond market and investing it in the stock market. This drives the yield down on bonds and therefore raises rates, yields and rates move in opposition.
Before the federal funds rate cut, mortgage rates were holding steady at 6.375% and today's rates are at 6.50%. So for the time being rates are actually increasing due to an over stimulating stock market. My personal belief is that the market is WAY over valued right now and this is truly hurting mortgages rates. Do not let the stigma of a "rate" reduction fool you mortgage rates are determined by numerous factors many of which are out of our control. At times you have to be an economical genius to have enough foresight to see what rates will do.
The biggest concern to me is over coming the negativity currently surrounding the housing market, although the government meant well the current impact on this market is actually further hurting the mortgage woes and the mind-set surrounding it!
Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker
Friday, September 21, 2007
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