Gong Xi Fa Cai! And a Good Year For Real Estate Mortgage Rates!

Gong Xi Fa Cai! And a Good Year For Real Estate Mortgage Rates!

I love that the Chinese characters for the greeting at lunar new year translate to nothing to do with the change of the calendar. If I have it right (from this site) the greeting is basically “Congratulations and wishing you prosperity!” And so I wish the same for you. May you have great joy and prosperity in this new year!

By the way, we are now in the year of the Snake. I asked a mandarin speaking friend about the change from the cherished Dragon to the lowly Snake and learned that many like to think of the Snake as the “Little Dragon”, so we can count on good things for this year as well. One of the economic pundits I follow conjectured that interest rates for the coming year would be quite tame, a good omen for real estate.

The chart at the left depicts the yield or rate for the 10-year treasury note over the past week. You can see that it continues to trade in a tight band just at and under 2.00% as it has for most of this new calendar year. The prediction from this mortgage-tracking blogger is to expect the 10-year to stay below 2.25% for the rest of the year.

The QE purchases would have to continue on through the whole year for this prediction to hold. And that seems a fair bet at this point. The dynamics of supply and demand in the markets continues to cause small shifts, but not such that it would move the market more than a quarter point. Real fear of inflation would be needed to see rates step up more dramatically.