“Where do you think rates are headed?”

Lou Tornambe, Loan Officer

I’m asked almost daily “Where do you think rates are headed?”

Let’s use the image of a harbor full of boats, I know, more nautical analogies.  Just can’t get the Florida boy out of me. The tide will ALWAYS raise and lower all boats.  The tide is inflation.  The boats are rates.  Now from time to time storms will pass by and raise or lower the boats for a brief period, but the tide is the granddaddy, the irresistible force that has to be dealt with.

Last week we saw storms enter the harbor as Brittan’s GDP came in negative, which scared investors of European debt and caused money to flow back into the US for safety, AGAIN ! This lowered rates, because if you’re going to give me your money anyway, I don’t have to pay you as much interest to entice you to invest with me.  Then new home sales came in higher than expected so that moved rates higher as it signaled an improving, inflationary economy.

Other factors created up and down “waves” as well:  US 4th quarter GDP, consumer sentiment,durable good orders, etcetera.  These storms have kept rates in a bumpy channel for the last 6 weeks.

BUT FOLKS, our economy is improving, albeit slowly.  Also, Moody’s (a major bond rating agency)stated last week that they may downgrade US debt sooner than previously thought – a debt down-grade AUTOMATICALLY raises rates. The combination will be like a full moon, raising the tide, pushing rates up, and nothing will stop it. So tell your clients that while we’ve seen local storms keeping rates in the high 4’s, at some point the tide will come in, clients shouldn’t  wait too long.
* 30 yr. fixed rates opened between 4.625% & 4.875% depending on program, credit and points.
* 15 yr. fixed rates opened between 4.00% & 4.25% depending on program, credit and points.

Have a great week.

Office: 720-489-0712
e-Fax: 866-561-9036
Cell: 303-880-9977

ltornambe@wrstarkey.com
www.LoansByLou.com
NMLSR# 257554
LMB100018385

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About dherries
Dave and Sally Herries and The RealtyColorado Team - Real Estate Broker serving the metro-Denver area. Offering properties in urban, sub-urban and rural areas. Our mission statement is "Enriching lives through real estate."

One Response to “Where do you think rates are headed?”

  1. Pingback: “Where do you think rates are headed?” (via The D Blog) « Sisters Tak'n Care of Business!

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