ast Updated: 4/30/2008
Mortgage Rate News
Through the last eight weeks, mortgage interest rates dropped, then remained stable.
We delayed our report because we wanted to see the Consumer Confidence Report which comes out on Tuesday and because the full range of National Association of Realtors is missing (naughty naughty! It was actually a week late). We wanted to wait until Thursday when the next mortgage rate survey comes out, but we could not do that.
Oops, Consumer Confidence slipped to a five-year low. The reading is 62.3. The base is 100, from 1985.
Tax rebates have gone out. They are in the bank accounts of some of us. But (and this is a BIG but), we have to spend that money on gas and groceries which are going up at a fantastic rate. Then, before the end of the year, some folks have to buy fancy converter boxes or televisions that get a digital signal. And we owe money to practically everyone.
We aren't getting any free money. "There ain't no such thing as a free lunch (TANSTAAFL)," according to Robert Heinlein, If you're rich, though, the spending does not stop (boats, motorcars, mansions, diamond bracelets...).Sales of Sport Utility Vehicles (SUVs) were down 28% for the first quarter of the year.
Not counting rental homes, 2.9% of all other homes for sale were vacant in the first quarter. That beat the fourth quarter of 2007 by .!%. To find worse figures, you have to go back to when Eisenhower was president.
New homes sales fell to their lowest rate in almost seventeen years.
Europe expects higher inflation. So does the USA. The EU does not expect a recession this year, but a "global slowdown." The USA is not sure.
Venture capital spending is down. Manufacturing is down. Bear Stearns was rescued, due to over-investment in mortgage backed securities. Fewer borrowers qualify for mortgages. Asia has mounting inflation. There is more. There is much more.
Ben Bernanke (the chairman of the the Federal Reserve Board - and the successor to Alan Greenspan) says a recession is possible. It does not take a genius to see that. Nor does it take a genius to see that the stock market may have hit bottom and is on its way back up, six months (or so) in advance of the real market, as usual.
The problem is inflation is here, too.
Interest Rate Prediction
Fixed rates on mortgages may go down a little, then stabilize. Then they should head up a little.
No one can guarantee economic or interest rate predictions, of course.