It has been a rough Monday for the mortgage market. A big wholesaler has just dropped out of the market. Wachovia has suspended all wholesale operations. This is another big lender to pack up shop and will have a big effect on mortgage brokers and the market. I know a few people didn't like my last blog about rates going up but what can I say the truth hurts. We are about to see a classic supply and demand problem. If you think gas short up quickly wait until rates follow suit.
THe real deal is that there is there is plenty of demand, with little supply of new money and a rates are just starting to reflect hte market conditions. It is in my opinion that rates are usually about a year and half behind what is going on in the market. I believe the only reason rates stayed as low as they have been is because the lenders were trying to keep volume up but at this point they need to answer the investors calls for higher returns given the increased risk in the market. I am not glooming and dooming again I am just trying to reflect the current situation.
Market values are down on top of everything else that is going on in the housing market and until investors feel that structured mortgage veichles can be relied upon again and rating agency's can be trusted I fear that we will continue to see a soft housing market and constrained lending pool. SO what does this all mean...?
In short: Save your money, spend wisely and wait out the storm...
In long: The market will rebound and just remember this one defining principal of real estate; they are not producing any more of it. Given a long enough horizon real estate will always go up in value.
Have a good week and thank you for your comments and concerns, they are always appreciated and I can only get better if you help!
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