Colorado Home Mortgage Loan

Colorado Home Mortgage Loan rates take another hard hit today.  New and old concerns related to inflation continue to make the headlines and Colorado Home Mortgage Loan rates are reacting negatively towards it.  The only major economic report released today were the Pending Home Sales numbers which came in considerably higher then expected.  Colorado Home Mortgage Loan rates already impacted by inflationary concerns saw an even greater loss when the report was released.  Colorado Home Mortgage Loan rates jumped up about .25% today and about .5% since last week.  Most Colorado Home Mortgage Loan lenders have hedged their pricing to a point where Locking just does not make sense.  The fear hear is how bad will inflation be, and to what extent will it play in the Colorado Home Mortgage Loan market.  Most experts believe that Colorado Home Mortgage Loan rates will continue to rise on concerns that inflation will increase due to the continued price increases related to oil.  So if you are closing in the near future and have not Locked in a rate then LOCKING may be a good idea.  I would recommend a LOCK today at 6.0% if you can still get that rate.  Colorado Home Mortgage Loan rates do have some room to drop especially if investors regain some confidence lost during current inflationary concerns. 

Colorado Home Mortgage Loan rates are impacted by economic conditions.  One condition not mentioned in awhile, but appears to be a perfect explanation to the economic status of our country today is “Stagflation”.  Colorado Home Mortgage Loan rates always do well during bad economic times, but mixed in with inflationary pressures Colorado Home Mortgage Loan rates have no other direction to go then up.  Stagflation is an economic condition first proposed back in the 1970’s.  It is controlled by two principal contributors inflation and economic slow downs.  We are currently experiencing both these conditions and should be talking about managing our decisions based on lessons learned during our last “Stagflation period”.  Colorado Home Mortgage Loans are greatly impacted by monetary policy.  Monetary policy is controlled by the Federal Reserve.  The Federal Reserve has two major concerns on their hand, Inflation and decreasing economic growth.  Depending on what policy the Federal Reserve implements can and will create a negative influence on the policy not being enforced.  For example if the Federal Reserve fights inflation then they will jeopardize stimulating economic growth.  Like wise Federal Reserve policy to stimulate economic growth will negatively impact inflation.  Kind of a damned if you do and damned if you don’t. 

Colorado Home Mortgage Loan rates also react positively or negatively depending on the policies being implemented by the Federal Reserve.  If the Federal Reserve combats inflation Colorado Home Mortgage Loan rates will react positively.  Likewise several techniques used to stimulate economic growth, like increasing the money supply will have a negative result on Colorado Home Mortgage Loan rates.   Stagflation was last felt during the late 1970’s, and though the Federal Reserve recognizes the issues on hand, they are conflicted on how the resolve the issue.  Fishers concerns on inflation lead to a steep increase in Colorado Home Mortgage Loan rates today and appears to be his biggest concern, however Bernanke and the other Federal Reserve Board members all feel Economic stimulation should be their primary concern.  This is why we are seeing Colorado Home Mortgage Loan rates increase and it is also why we are in the making of another possible “Stagflation Period”. 

As I stated before Stagflation can result when and economy is slowed by an unfavorable supply shock, such as an increase in the price of oil hear in the U.S. As inflation increases Economic conditions tend to worsen.  When the Economy faces times of uncertainty and an obvious decrease in production monetary policy is used to kick start the sluggish economy.  When the Federal Reserve jumps in and begins to increase the supply of money they increase the pressure centered around inflation.  As a result inflation increases even more.  The increased inflation causes Colorado Home Mortgage Loan rates to go up. Stagflation only becomes a problem when the marginal impact on Policies used to combat the economic issues cause more harm then good.  Generally the Federal Reserve can either stimulate the economy or attempt to rein it by adjusting interest rates making it cheaper to borrow money.  Adjusting the rate down tends to improve growth but it also increases the pressure on inflation. Adjusting the rate up tends to fight inflation but it hinders economic growth. During periods properly described as stagflation both problems co-exist. Major economic conditions of unusual proportion will have already created near-crises on both fronts before stagflation can set in.  I don’t have a solution to where Colorado Home Mortgage Loan rates will go but our government needs to improve on policy decision especially during such a fragile moment in time.  Let’s not have history repeat itself or we may find our unemployment rate hit 10% and Colorado Home Mortgage Loan rates will hit 10%.

Now with that said, I am confident that the Federal Reserve will do the right thing for the best long term results.  Now we may not like what they are doing, but so far they have shown no signs of repeating bad economic decisions.  Especially over supply issues in the money supply.  Call me with your Colorado Home Mortgage Loan questions and give me a chance to help you find the right Colorado Home Mortgage Loan.

Daniel 

Colorado home mortgage loan programs got a bit of good news today.  The Fed’s issued two new economic reports both coming in lower then expected.  Colorado home mortgage loan rates have dropped a bit on the news, but the lack of activity in the market makes it hard to gauge exactly what kind of long term impact these reports will have.  Stay tuned on Monday and Tuesday to see if in fact  rates drop on Colorado home mortgage loan programs.  The first report issued early this morning had its importance tied to inflation.  I wrote a lot about inflation and how inflation impacts Colorado home mortgage loans on my other blog site: www.coloradomortgagebanking.com/news so I will not go into too much detail in this article.  The report I am referring to is the Personal income and outlays report which focuses on an individuals source of income, and total income, from month to month.  This report also indicates where the income is being spent.  If spending activity is high the concerns for inflation is high.  When inflation concerns are high Colorado home mortgage loan programs tend to see interest rates increase.  The good news is that this economic report came in lower then expected and actually reiterated what I have been saying for awhile, and that is that inflation is not as bad as investors would have us believe.  The second report came from the University of Michigan and it was the Consumer Sentiment Survey which basically illustrates a persons belief on what the economy is doing.   This report came in very low but not too much lower then expected.  It goes to show that as a society we continue to have our perceptions manipulated by the mass amounts of media experts all claiming to know exactly what the economy is doing.  Unfortunately most of them have a pretty good idea, but because bad news increases ratings, good news normally finds a back burner.  Make no mistake we have major issues in the Colorado home mortgage loan markets and will continue to see these issues over time, but we do have some good data to report.  The most important misconception is that inflation has gotten out of control.  When you look at historical data we are actually trending very low.  Investors have too high of an expectation for where inflation should be, and it is not as bad as they would lead you to beleive.  When investors figure out a way to overcome their fears and accept the facts as it is reported, Colorado home mortgage loan rates will improve.  The next misconception is that home sales are considerably down, actually new data and previously reported data all say home sales are exactly where they should be.  The problem with the data is that sales are compare today with some of the best home sale numbers of all time.  People are still buying homes we are just not breaking any new records.  The last part comes in the forecasts of Foreclosures, yes Foreclosures are high, but they still account for a very small portion of all loans issued.  Foreclosures are a natural part of doing Colorado home mortgage loan business and financial institutions understand and calculate a portion of their portfolios going into default.  The press has jumped on this news to indicate a catastrophic epidemic hitting middle America, and though it is bad, it is not nearly as bad as they would have you believe.  Hope this helps, my recommendation continues to be a FLOAT recommendation.  We will watch the markets for you closely to see what next week will bring.  In the mean time have a great weekend and God bless.

Daniel