Rates are going up...

By
Real Estate Agent with Ranch & Resort Group ​L​I​C​-​3​2​0​9​7

FHA @ 7% today

30 YR Fixed just priced one out @ 6.75 and the credit was excellent

A little forwarning trying and warm your clients up to the idea that rates are going to get worse and will continue to for some unkown amount of time.  This idea of low rates spurring growth is way to late in the game to make a difference so the long postiton on rates is that once we realize growth will no longer be fueled by low rates, they will begin to rise as the market starts to stabilize the right way...Rewarding risk with return on investment is the only model for mortgages that will be left after the collapse of the 2ndary market.  I just want people to warm up to the idea of higher rates now so it is not a shock later.  For anyone who thinks that rates will not go up to 14% read some history.  After a crisis half as bad as this one in the late seventies 30 years mortgage rates shot up in two years 5%, this will not likely happen in todays market; it will definatly happen.  Just remeber this:  You heard is here first...

America stay strong there are rough waters ahead...

Comments (7)

Roberto Gonzalez
RG Realty Inc - Hagerstown, MD
Hagerstown Commercial Real Estate

MMMM that is all we need!!! is getting more difficult to get a loan as is, this might complicate things a bit more, thanks for the news!

Oct 27, 2008 09:41 AM
Brian Brumpton
Keller Williams Boise - Boise, ID
Boise Idaho Real Estate

Nathan,

I believe what you are saying but I still hope you're wrong.  If rates increase significantly downward pressure on home prices will increase as well.  We're already having a hard enough time clearing the inventory we've got.  Sellers should take this into account now and get aggressive.

Oct 27, 2008 09:51 AM
Scott Smith
Coldwell Banker Residential Brokerage - Gloucester, MA
Gloucester & Rockport, Massachusetts

I just heard rates jumped half a point over the weekend. Are "they" trying to kill what is left of the RE market?

Oct 28, 2008 10:54 AM
Richard Sweum
1st Security Bank - Everett, WA

Just for fun, I'm predicting a 7.5% 30 year fixed FHA within 2 weeks.  Sad times.

Oct 28, 2008 04:49 PM
Scott Smith
Coldwell Banker Residential Brokerage - Gloucester, MA
Gloucester & Rockport, Massachusetts

Rich: Most of my market are jumbos. What do you predict there?

Oct 29, 2008 10:58 AM
Nathan Goodman
Ranch & Resort Group - Bozeman, MT

jumbos will be very high higher than conforming...

Oct 29, 2008 11:03 AM
Richard Stabile
Re/Max Real Estate Limited - Oradell, NJ
Bergen County New Homes Builder Realtor

Nathan:

A revaluation to even 9,10% mortgages drops real estate another 20 %.

I won't disagree but, all this money pouring into the market will go somewhere.

The only risk problem I don't have a handle on is the Bankruptcy Judge set aside of a mortgage.

This came out of the bail out bill.

Richard

Oct 30, 2008 03:29 PM