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Looking at this week's interest rates... 3 questions pop up:
1. Why are the average interest rates going up? I don't know how this works or what financial factors contribute to the rates' going up/down... but doesn't this prevent people from buying homes or refinancing?
2. Doesn't this promote the stagnation of real estate?
3. How high is going to get in the immediate future (2012-ish)? Do you guys see it plateauing soon or coming down again?
Economy appears to be improving, not just here but worldwide. As the economy improves it will lead to inflation which is the biggest enemy of interest rates.
Stock market up
Unemployment has dropped or slowed
Companies are slowly hiring again
Who knows...
Quote:
Originally Posted by VictorBurek
Economy appears to be improving, not just here but worldwide. As the economy improves it will lead to inflation which is the biggest enemy of interest rates.
I mean - wow! Seriously? I want some of that koolaid. Please send some my way. I can't even imagine what "news" source one reads to believe any of that.
Interest rates are going up because The Bernank is running out of options. Nobody watched him squirm and lie in front of Congress recently?
I mean - wow! Seriously? I want some of that koolaid. Please send some my way. I can't even imagine what "news" source one reads to believe any of that.
Interest rates are going up because The Bernank is running out of options. Nobody watched him squirm and lie in front of Congress recently?
Mike,
I said economy appears to be improving. Manufacturing reports have been great, private sector job growth, unemployment claims have been dropping which you can see in the 4 week moving average, consumer sentiment and confidence up.
What do you mean he ran out of options? and why would that cause rates to spike?
I said economy appears to be improving. Manufacturing reports have been great, private sector job growth, unemployment claims have been dropping which you can see in the 4 week moving average, consumer sentiment and confidence up.
What do you mean he ran out of options? and why would that cause rates to spike?
Just out of curiosity, where do you get news like that? Maybe I should start reading what you're reading. Consumer confidence and sentiment up? Please link me some reports - I could use em. All I see are "seasonally adjusted" numbers and prior revisions to help the statistical impact of the next month... Report a number, revise it a week later, then report the next number as a percentage off the revised number. It's amazing how you can put a sunshine on some things. But even then, I don't see anything to indicate things are improving. Maybe it's just me.
Your last comment about the global economy was a good one... you don't realize what the Fed is doing to the global economy by putting a $100B a month directly into the stock market? It's spiking commodities, energy, and food big time. What countries could you possibly be talking about "improving"? Food riots because people can't afford to eat are not a good thing in my book.
Just out of curiosity, where do you get news like that? Maybe I should start reading what you're reading. Consumer confidence and sentiment up? Please link me some reports - I could use em. All I see are "seasonally adjusted" numbers and prior revisions to help the statistical impact of the next month... Report a number, revise it a week later, then report the next number as a percentage off the revised number. It's amazing how you can put a sunshine on some things. But even then, I don't see anything to indicate things are improving. Maybe it's just me.
Your last comment about the global economy was a good one... you don't realize what the Fed is doing to the global economy by putting a $100B a month directly into the stock market? It's spiking commodities, energy, and food big time. What countries could you possibly be talking about "improving"? Food riots because people can't afford to eat are not a good thing in my book.
Mike,
I am not making them up. Go to any economic calender, such as bloombergs, or ForEx and look.
Again, i dont think our economy is really improving. But stocks have rallied and continue to do so. So market participants think the economy is improving.
But instead of looking for reasons to disagree with me or others, why dont you answer the original posters question. WHY ARE RATES RISING? You answered that by saying Bernanke ran out of options. Wow, what does that mean?
Investors tend to buy stocks when the economy is improving. Investors tend to buy bonds when the economy isnt improving. The 10 year treasury note has risen from 2.5 in Nov. of last year to 3.70 today. So by looking at the markets, it does appear the economy is improving and that is the reason why stocks are rallying and bonds are tanking causing mortgage rates to rise.
I think Mortgage rates reach 10-month high is a pretty realistic portrayal of the current situation. It doesn't try to sugarcoat it, it says straight out that the numbers are not great, but they are an improvement, and that is bringing some back into the stock market.
To the OP, it is also good to keep in mind that the incredibly low interest rates of the past decade are an anomaly in historical rates. There was a time that anything below 10% was a fabulous rate. There was even a time when anything below 20% was a good rate. Today's interest rates really have nowhere to go but up.
*Edit, to your actual questions. It doesn't prevent people from buying or refinancing, however it will make the money more expensive to borrow, so it might make them able to afford less house than they could have, or make it not worthwhile to refinance anymore. And yes, higher interest rates do slow down the real estate market. But as I said above, interest rates are still very good. As for the future, unfortunately none of us has a crystal ball. I really don't think it is going to go above about 6% in 2011, but I also would have never predicted it would have dropped as low as it did over the last year. By 2012, your guess is as good as mine, because it would only be a guess.
I mean - wow! Seriously? I want some of that koolaid. Please send some my way. I can't even imagine what "news" source one reads to believe any of that.
Interest rates are going up because The Bernank is running out of options. Nobody watched him squirm and lie in front of Congress recently?
Hmm sarcastic much? You don't have to sound like a jerk about it. What news are you reading? Do you see the stock market rising? I do. How about the employment numbers? I see improvements. How about the tech sector hiring? Last I read, Google was starting to hire again, which is definitely good news as oppose to layoffs.
Dow over 12,000 as remarkable bull market rolls on - Forbes.com (http://www.forbes.com/feeds/ap/2011/02/01/general-materials-us-dow-12000_8286978.html - broken link)
Always take these news with a grain of salt. But I do see positive indicators, which is welcome news in this downturn.
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Please link me some reports - I could use em. All I see are "seasonally adjusted" numbers and prior revisions to help the statistical impact of the next month... Report a number, revise it a week later, then report the next number as a percentage off the revised number. It's amazing how you can put a sunshine on some things. But even then, I don't see anything to indicate things are improving. Maybe it's just me.
