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Mortgage rate commentary

By
Real Estate Agent with Wilkinson & Associates

While the full reality of a nationalized mortgage market may take a while to fully sink into the market's mentality, the immediate effect was a sizable drop in mortgage interest rates this week for well qualified buyers.  Most of the drop in rates was probably due to a "relief rally".  Investors now have the assurance that the secondary mortgage market will continue to function with the full backing of the United States government.  Freddie Mac and Fannie Mae will continue to exist, and more importantly, whatever structural changes that may come, all the outstanding loans will continue to be insured.

This week is another huge week in the financial markets.  We'll get insight to the industrial output, consumer level inflation and the Fed is meeting to set monetary policy.  Mortgage rates could be very volitle again this week.  The Fed is expected to hold interest rates steady again, but after last week, we could see some changes to the accompanying policy statement.  Any hints that the Fed is ready to move rates up will be met with mortgage rates moving upward.

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