10, 9, 8, 7, 6, 5, 4, 3, 2, 1 HAPPY NEW YEAR!!!! But while many of you will have your eyes glued to your flat screens watching a 1080p image of a large, light encrusted ball drop at Times Square, others will be paying closer attention to mortgage rates which many think will go up, up and away.
In fact, they have already inched upward. The Mortgage Bankers Association reporting a second consecutive week rise to 4.92% from 4.88%
The big question mark, of course, is the new year. As the Wall Street Journal and others point out, the Federal Reserve is expected to bring to a close its recession fighting practice of buying up mortgage-backed securities. That is largely what has brought mortgage rates down to their lowest levels since after World War Two.
There is some concern, as you can well imagine, that should the Fed go through with this, it could have the effect of nipping any economic recovery in the bud, making it more difficult for people to buy homes or refinance their existing mortgages.
Probably more relaxing just keeping your eye on that stupid ball. 10, 9, 8, 7, 6, 5……………
Photo: amelungc
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Article Author: Charles FeldmanCharles has written 179 articles for us.
Visit Charles's Website: http://www.thefeldmanblog.com
Charles is currently reporting for KNX Radio in Los Angeles, is the co-author of the book No Time To Think, and can be found commenting about the news on his blog, The Feldman Blog, as well as on The Huffington Post.
Joshua Dorkin
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Good note.
Wall Street is working on a new credit default swap for prime mortgages.
It should be out early 2010.
That will likely lead to investors shorting the bond market, and that will have a significant effect on mortgage rates, both commercial and residential.
Here’s some basic info on it, but I’m sure you can dig up more on the web somewhere.
http://www.reuters.com/article/idUSN0859668720091208
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