Just wanted to post a quick note following up on some of the housing comments I’ve made both here and in Dividend Superstars.
Along with all the other reasons I’ve been citing to remain skeptical of a housing recovery, you can add to the list higher mortgage rates. The 30-year fixed rate is now firmly above 5%, and actually getting closer to 5.5% nationally.
Low by historical standards, to be sure. And the Fed may certainly intervene again to get it back down. But in my mind, a 50bp jump doesn’t bode well for sales going forward. Not with credit conditions still tight and confidence still so shaken.
I won’t be surprised to see an initial gain in sales as people hastily try to close deals before additional rate increases. However, long-term, higher rates will damage the market. Period.
Related posts:
- Home prices dropping like a rock … I was down at Weiss headquarters last week, and during my trip I drove around visiting a lot of my old...
- The problem with housing “solutions” … I just finished reading this story on CNN about a foreclosure court in Fort Myers, Florida. The story explains that this...
- Oh, NOW it’s official? I love how we finally have official word that the country is in recession. Gee, thanks NBER! In case...
{ 1 comment… read it below or add one }
For a young fellow such as you are, you impress me with your wisdom well beyond your years. I read your articles and agree with you most of the time. I am a senior and hope that the younger generation will get your messages.