As oil passes the $130 a barrel mark, which inevitably drive the price of gas up- tomorrow, people will look for some reprieve.

 

I cannot tell you the interest rates will drop anytime soon. They are however hovering consistently in the 6% range.  This is good.  Some folks get rate quotes as low as 5.5%.  Are they out there and are they real?  Not sure, but I do not see them at any of the big banks.

 

Rate should be closer to 5%.  Yes, I said it.  They should be down around 5%.  So, what is stopping them??  The price of oil, the dollar is just stuck in the toilet and the rising cost of everything you need.  What is the biggest affect on rate (other than these)? The secondary mortgage market needs to loosen up.

 

What do I mean by this?  Big banks and big business need to be able to start turning over their mortgages, selling them on the open market and being able to turn the money over again.  This is called the Secondary Mortgage Market and makes the world go round and round.

 

So, the price of oil going up should make interest rates go down, but it does not have that sort of influence anymore.  Global Financial Markets rule the world in your little town.  So, fill up on your way home and do not drive too far, because you will need more money to buy food next week!

 

Yeah- Happy Memorial Day!  

Dale Siegel