Price alert for Colorado home loan rates: Why are these rates getting worse instead of better?
Colorado home loan rates slipped again this afternoon as federal regulators continue to send strong signals on liquidity reform. Today’s housing committee had several open and public opinions about the severity of the housing market and what will be done in the near future. One thing for sure, we are in uncharted waters. Today’s hearings focused on a bill that would deliver $400 Billion dollars in bailout funds to consumers who are facing foreclosure or financial hardships due to poorly designed Colorado home loan programs. Normally news like this would actually allow Colorado home loan rates to drop, but that did not happen. Instead the market reacted more heavily on what was said outside the meeting walls versus what was said in the meeting. Several political figures have expressed strong opinions on what has caused the issues in the financial mortgage lending markets. Sen. Bunning indicating on MSN that the last two Federal Reserve Chairman’s dropped the ball. He indicated that over the last 12 years the Fed’s stood ideally by as the crisis built. I agree that in hind sight, stonger oversight would have been a better deterrent for what is going on in the market today, however it is easier to recognize that today after the fact then when it was going on. Remember that at the time our economy had experience some of the greatest economical booms this century has ever seen in the financial markets. Its would have been political suicide to convince their consituants that reform was needed to limit growth. They would have been voted right out of office and guess what, Sen. Bunning having been in the Senate during these times, played along side everyone else. Colorado home loan rates continue to fluctuate up and down in a market uncertain of what is to come. Investors are holding out hope that our economy will start its recovery soon, but have started to implement a wait and see approach. Bond volume is down and when volume is down, and supply is up, Colorado home loan rates react negatively. Regardless of the economic data coming in, if we don’t have investors buying we become victims to the supply side movement of rates. Economic data coming out lately should have created pressures to buy Mortgage Backed Securities not sell them. Rates should be coming down. The same forces presented themselves into the market back in 2003 with a much different result. We saw rates hit a historic low and for the first time we saw fixed rates hit 5.0%. . The spread between the 10 year treasury bond and 30 year 5.5% coupon bond is such that rates should be lower then what is being offered by Colorado home loan lenders. So the question is do we lock or do we float? Well if you locked last Friday as recommended then you are doing much better then those faced with locking today. However its hard to say how long this lack of investor confidence will last and how much higher rates will go before seeing some relief. I believe that until we see economic data indicating a clear sign on the state of the economy, investors will continue to take a cautious approach to the market. This will keep volume trading to a minimum. Until volume picks up it really doesn’t make a difference on what is reported, we will continue to have a supply issues, causing Colorado Home Loan rates to go up. Have a great evening and good luck:-) Read more at www.coloradomortgagebanking.com/news
Tags: Colorado home loan, economic data, investors, Rates
