Sacramento Mortgage Rates on the Rise

This week’s wholesale inflation numbers gave the markets a good scare. The beast is loose, and the Fed is trapped between trying to prop up a sagging economy and locking the inflation monster back in the closet.

Mortgage rates are on the rise, and if Bill Gross is correct about inflation being deliberately understated, this whole thing gets a lot worse before it gets better. Part of the blame lies with those who manipulate the figures, part of it rests with those of us “who have for so long now been willing to be entertained rather than informed.”

Gross strikes a dissonant chord, activating one of my personal rants as he writes,

We care more about whos going to be eliminated from this weeks American Idol than the deteriorating quality of our healthcare system. Alternative energy discussion takes a bleachers seat to the latest foibles of Lindsay Lohan or Britney Spears and then we wonder why gas is four bucks a gallon. We care as much as we always have €“ we just care about the wrong things: entertainment, as opposed to informed choices; trivia vs. hardcore ideological debate.

Amen. We have become a culture addicted to distraction. Wake up!

But I digress. Mortgage rates may well be resting at the base of a long climb. Declining home values make it ever more difficult to meet the equity requirements needed to refinance, and Congress is already hopelessly behind the curve with any relief for homeowners.

So, if you need to refinance your 3/1 or 5/1 ARM, do it now before values make it impossible. I know you have a year and a half left on the fixed rate, but in another 18 months you may just be one more homeowner who owes more than he owns. The promise of more bad economic news just isn’t going to have the usual helpful effect this time around.

And be sure to read the rest of Bill’s newsletter….