> Is it the general consensus that Jumbo mortage
> rates are normal, low or artificially low.
There’s little consensus on this board about anything, but probably most people are of the opinion that rates are lower than they should be. (If investors were being rational)
> It seems that with the record number of defaults
> and the asian countries withdrawing over 50 bil
Yes, both of those things should be making investors much more reluctant to buy mortgages. (or mortgage backed securities) And they are, however, most first loans and loans for less than $417k are sold not to investors but to the government “agencies”. Which are still buying loans.
> I would also think that foreign investors would
> be frothing at the mouth that the US has purposely
> devaluated the dollar.
Yeah, that’s the part that really surprises me. All I can figure is that foreign investors psychological stance is that the dollar is still the safe currency. (Although recent history makes you wonder why anyone would think that.) All I can figure is that opinions are slow to change and only change after people get burnt really well.
The only argument I can make that rates will go down is that the economy is in trouble and the fed is likely to do everything it can to lower rates in an attempt to keep things going.
But you would think that foreign investors would be pulling money out of dollar assets and going to play elsewhere. And maybe they are to some degree, but there is still lots and lots of foreign money floating around in our system.
