What castle is this and where is it located?

 

 

 

 

 

I had three conversations today:

 

1.    Client: Oh my God, rates are skyrocketing!  My cousin told me that rates are going to continue to go up.  Should we lock in, even though I have not found a house yet?

 

2.    Informed personnel and trusted mortgage advisor at a major bank: Wow, rates really shot up last week, but you see they already went down a bit. My lock desk believes that after the Government does a big trade next Thursday on treasuries, the rates will go back down. So, I am advising my brokers not to get crazy and lock people in prematurely. Unless your client needs to close over the next two weeks and has to lock, don’t let them get crazy!

 

3.    A stockbroker: Hey, I am selling (puts) options in the 30 year treasuries. Where do you think rates are going?  My trading desk thinks that rates will stay low and then begin to rise consistency next year. They think that they will stay below 6% for several years. If we do the trade over the next few weeks, they should have a great return by next year.

 

 

As always, I do not panic and never let my clients act and lock on an upswing. The interest rates will move up and down with the stock market, prices of gold and oil and our currency exchange in the global markets. The mortgage rates are not ready to rise for good anytime soon. Why, do I believe this? Because if mortgage rates rise, people will be able to borrow less money. The economy needs the real estate market to get back on its feet and stabilize. High interest rates will kill the market prematurely, and we all know that is not an option!

 

Dale Siegel