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Sacramento Mortgage Rates: Is the Treasury Bubble the Next to Burst?
Okay, time to get back on track. I am still recovering from the hacking that took down Lending Clarity and many other Tomato blogs. More than that, Ive just been extremely busy pre-qualifying home buyers. Prices in many areas of the Sacramento real estate market have bounced off a hard floor and pent-up demand has buyers fighting it out once again over well-priced properties, often bidding prices up in the process.
Meanwhile, mortgage rates have been locked in a narrow range since the beginning of the year. Freddie Macs Complication of Weekly Survey releases for 2008 shows this well. For most of this year, rates have stayed within a whisper of 6%. The weekly average belies the incredible daily volatility we have experienced.
The Treasury Bubble
With corporate earnings reporting the past couple of weeks, things looked bad. Its just that they werent as bad as everyone expected, so that made them look good, well, in a relative sort of way. And despite a plunge in consumer confidence to the lowest level in 26 years, the last round of corporate write-downs have caused a lot of economists and Wall Street pundits to wonder whether the worst is over.
If it is, and if the investors who fled to the safety of bonds, especially Treasuries, sell off suddenly, expect interest rates to rise. Expectations for another 50 basis point Fed cut next week have already evaporated, and even hopes for 25 basis points are fading. With renewed inflation concerns on the table, higher mortgage rates could be just around the corner. That would not be a big help right now as we struggle back to our feet.