Financial Update by Maurice

Rates are up considerably this week with an approximately .5% rise on various long term programs. Bonds have sold off steadily over the past two months, taking the yield on the 10 year Treasury note to its highest levels since the spring.  The yield closed today at 3.3% today, a full .21 basis points higher than last Friday. At the same time, inflation expectations have risen as well.

Interest rates are fantastic as we are in the 4’s and looking great. This week you must look at our true jumbo 30 year fixed rates. They are in the low 5% ranges which is quite an improvement as more of our investors come to market on jumbo loans.

Here is the question of the week: Will rising rates spur home sales? These are unprecedented economic times, and the allure of cheap credit doesn’t seem to matter much — at least not to consumers who are coping with an unemployment rate near 10%. Rising rates would seem to make housing matters even worse, but there’s a glimmer of hope that the opposite will occur. Those buyers who have been eyeing new homes may finally pull the trigger once they realize that rates are heading north again. After all, borrowing is still cheap, and it’s best to lock in rates today instead of waiting to see what happens tomorrow.