Well as stated in the previous post the Fed's will meet tomorrow to decide whether to cut key rates "discount rate" to help free up market liquidity. I have watched the market rather closely the last couple of days and noticed a couple of things.
First, "mortgage rates" once at 2.5 year lows are now rising and rising fast! The market is anticipating or "building-in" the Fed's predicted cut and the 10-year treasury is suffering from it. The 10-Year Treasury Bond is a key predictor in determining mortgage rates.
Second, the market is also reacting in a similar of positive fashion to the "Sub prime Aid Plan" the Bush administration has enacted. This administrative plan puts a rate "freeze" on some sub prime loans set to be reset in the coming months.
Third, today a "trade group" representing realtor's said it is predicting increased sales in 2008 and more stable home prices. Although many economist are not so optimistic, with many stating this is just a "ploy" to down play the negativity surrounding the housing debacle.
In summary the market is reacting positively to all of the above and in essence has impacted "mortgage rates" in a negative way. Hopefully, we will see the 10-Year Treasury Bond go down in the coming days.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Monday, December 10, 2007
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