ratesEarlier in the year there was increased optimism that the
Federal Reservewould begin to ease interest rates to the enjoyment of many would be home buyers. Now it appears at least for the moment, that interest rates may move up before they begin to move down. The money supply, it is a tight'nin. I also received notification yesterday that one of our lenders was no longer doing stated loans on owner occupied properties up to a 95% loan to value ratio. This applied to home equity lines of credit or second trust deeds.

I am convinced that everything moves in cycles. Several years ago 100 % financing was unheard of and certainly not available to the masses. Then someone had a brainstorm and figured out ways to make home ownership more affordable. Lending standards were eased, enabling many more people to participate in the American Dream. Now with the recent increase in foreclosure activity, the pendulum is swinging the other way. Give it another 5-7 years and it will reverse itself. Bingo, the cycle is complete.

Call me an optimist, but I have to believe interest rates will come down.
I think some key indicators are in place such as Lowes and Home Depot
reporting disappointing earnings. A slower housing market is having major implications for two of our biggest retailers. This economy cannot forge ahead with gas prices at $3.75/gallon. Picture a cruise ship streaming towards the US from Europe in the middle of the Atlantic Ocean. If the captain hits the brakes to turn around, momentum is going to continue to carry the ship forward before it stops. Maybe the cruise ship is akin to the US economy, we're still driftinig forward.

 

 
Posted by Doug Willis on 05/24/2007 03:21 PM   Comments (1)   interest rates  
Generate short URL

1 Comments on whats UP with interest rates?

MAY
24
2007
1 Featured Post

I do not think they will go down that much.  In fact we are still low for Historical standards.  people need to realize that if they stay low we will not be able to make money.  It is best if they stay down and little by little move.  This way inflation will be kept in check as well.

The biggest issue is not the interest rates.  It is that we need to learn how to use our money and how to spend it.  We need to learnt he difference between need and want.
3:31pm • #1


What does the graphic say?
Leave a response…

(optional)
Spam Prevention:
 

Doug Willis

Pasadena, CA

More about me…

RE/MAX Property Concierge

Address: 266 Monterey Rd., Suite B, South Pasadena, CA, 91030

Office Phone: (626) 432-4615

Email Me

Primarily focused on the Pasadena, Altadena and South Pasadena Real Estate markets with sales history by area as far back as 2005


Links

Archives

RSS 2.0 Feed for this blog