The Week in Review:
On November 3rd, the Fed announced a second round of Quantitative Easing (QE) for the purpose of spurring along the economy and to keep interest rates low. The initial reaction to the news did cause home loan rates to move slightly lower. However, we warned last week that the markets did not like the QE news and rates looked like they could rise.
So, what happened? Home loan rates increased every single day and ended the week about .25% higher.
What to Expect:
The markets do not like the possibility of increased inflation that the Fed’s plan may cause. China also announced last week that they may need to raise rates to fight future inflation.
The sentiment in the stock and bond markets has changed with the focus on the threat of future inflation instead of current economic woes. Unfortunately, this is not good news for home loan rates.
The downward trend that has been in place since April has officially been broken. Although it’s always possible for rates to drop, it will take a change in market attitude to make that happen.
Breg-ometer:
Next 7 Days: Rates most likely continue to rise
Next 30 Days: With rates increasing rapidly, we expect rates to bounce back a bit but don’t expect to see rates as low as we saw a couple weeks ago
Next 90 Days: It appears the market has picked a direction and the trend will be a rise in rates.
Courtesy of:
Bob Bregitzer
Southeast Mortgage
[where: 30339]