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Sacramento Mortgage Rates: Forget What You Thought You Knew
To forecast mortgage rates, astute borrowers have traditionally watched a variety of signposts including the 10 year Treasury, the Fed, the stock market, inflation, and any of the weekly reports that might reveal whether inflation or a slowing economy was gaining the upper hand.
Forget what you thought you knew about predicting rates. The tea leaves aren’t talking. The bungled bail-out, the subprime-turned-general-mortgage crisis, the wildly gyrating stock markets, the global credit freeze, and plummeting consumer confidence have created a perfect storm of uncertainty. And it seems that no matter what the latest news says or how much the fed cuts short term rates, mortgage rates stubbornly refuse to fall.
In the end, it’s really about supply and demand. Banks, hedge funds, and sovereign wealth funds bitten by the risk and leverage they thought would produce high returns are now deleveraging and don’t have the appetite or the capital they once had to buy more mystery derivatives from the Wall Street financial alchemists.
Even with this weeks plummet in oil prices, tame inflation reports and the worst consumer sentiment reading in recent history, rates are not dropping.
So if you’re buying or refinancing a home, don’t be greedy. Lock your rate early and avoid gambling in hopes of catching that 5.5% fixed rate, because you are likely to experience more pain than pleasure.
“Only two things are infinite, the universe and human stupidity, and I’m not sure about the former,” Albert Einstein