Hello all: Mortgage interest rates have improved recently quite a bit. Why is this? I think it's because of the high price of oil.
Recently, OPEC (the conglomerate of oil producing nations) decided not to deal with prices. In other words, they couldn't decide. The Saudis were in favor of setting a price target at $80/barrel. But not every nation could agree so the price of oil has been hovering at right about $100/barrel.
We've already seen how high gas prices have impacted our pocketbook. I can't tell you how many times the predominant conversation at the pump was about how much it cost to gas up. And consumers make choices. They drive less, buy fewer cars, etc., etc.
I think OPEC and the major oil companies decision is personally greedy and short-sighted. Witness what has happened to the stock market because of their decision. The market is now under 12,000 and I wouldn't be surprised if it goes lower until the oil situation is resolved.
Because the stock market has fallen, people are fleeing to safety by investing in treasuries. This benefits mortgage interest rates and I expect this trend to continue. It's interesting that Ben Bernanke recently stated that our economic recovery is very slow. For some of us it never really started. The bottom line is this. If you want to choke off a recovery make prices unaffordable where people need to make choices.
On the other hand, it's an excellent time to be investing in real estate for this very reason. Now that I'm done with my self-promotion, I wish you all a great day and a fantastic weekend!
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