effect of lower interest rates on home prices

[kev374]

Merill Lynch is now forecasting 2% fed funds rate by 2009 Q2. If this turns out to be true would it prevent home prices from contracting? Opinions?

[JWM in SD]

No, because long term rates don’t necessarily correlate to the Fed Funds rate. Besides, foreign lending to USA would dry up completely at that point and the dollar would lose even more than it already has. At that point, you’ll see mass layoffs because companies won’t be able to predict their expenses with a high degree of certainty. I.E. the inflation won’t make into wages.

[JWM in SD]

No, because long term rates don’t necessarily correlate to the Fed Funds rate. Besides, foreign lending to USA would dry up completely at that point and the dollar would lose even more than it already has. At that point, you’ll see mass layoffs because companies won’t be able to predict their expenses with a high degree of certainty. I.E. the inflation won’t make into wages.

[JWM in SD]

No, because long term rates don’t necessarily correlate to the Fed Funds rate. Besides, foreign lending to USA would dry up completely at that point and the dollar would lose even more than it already has. At that point, you’ll see mass layoffs because companies won’t be able to predict their expenses with a high degree of certainty. I.E. the inflation won’t make into wages.

[JWM in SD]

No, because long term rates don’t necessarily correlate to the Fed Funds rate. Besides, foreign lending to USA would dry up completely at that point and the dollar would lose even more than it already has. At that point, you’ll see mass layoffs because companies won’t be able to predict their expenses with a high degree of certainty. I.E. the inflation won’t make into wages.

[JWM in SD]

No, because long term rates don’t necessarily correlate to the Fed Funds rate. Besides, foreign lending to USA would dry up completely at that point and the dollar would lose even more than it already has. At that point, you’ll see mass layoffs because companies won’t be able to predict their expenses with a high degree of certainty. I.E. the inflation won’t make into wages.

[alarmclock]

If you felt that mortgage rates were going to rise, is there a product that lets you “lock in” a desirable mortagage rate several years before the real estate purchase? It would be trivial for the lender to calculate and charge the interest difference between the mortgage rate and the current rate of interest on a CD on the to-be-lent money.

[alarmclock]

If you felt that mortgage rates were going to rise, is there a product that lets you “lock in” a desirable mortagage rate several years before the real estate purchase? It would be trivial for the lender to calculate and charge the interest difference between the mortgage rate and the current rate of interest on a CD on the to-be-lent money.

[alarmclock]

If you felt that mortgage rates were going to rise, is there a product that lets you “lock in” a desirable mortagage rate several years before the real estate purchase? It would be trivial for the lender to calculate and charge the interest difference between the mortgage rate and the current rate of interest on a CD on the to-be-lent money.

[alarmclock]

If you felt that mortgage rates were going to rise, is there a product that lets you “lock in” a desirable mortagage rate several years before the real estate purchase? It would be trivial for the lender to calculate and charge the interest difference between the mortgage rate and the current rate of interest on a CD on the to-be-lent money.

[alarmclock]

If you felt that mortgage rates were going to rise, is there a product that lets you “lock in” a desirable mortagage rate several years before the real estate purchase? It would be trivial for the lender to calculate and charge the interest difference between the mortgage rate and the current rate of interest on a CD on the to-be-lent money.

[(former)FormerSanDiegan]

No, because long term rates don’t necessarily correlate to the Fed Funds rate.

However, the reset rates DO correlate with the Fed Funds rate. Mortgage resets over the next 12-18 months have been cited as the next wave of downward pressure. These are primarily alt-A and prime borrowers.
The rates over the next 24 months WILL have an impact on these resets and WILL have an impact on whether or not foreclosure rates will continue to trend higher or start to flatten.

For example, ALT-A and Prime mortgages tied to the 1-year LIBOR with the typical 2.25% margin would rest currently at 6.75%.

[(former)FormerSanDiegan]

No, because long term rates don’t necessarily correlate to the Fed Funds rate.

However, the reset rates DO correlate with the Fed Funds rate. Mortgage resets over the next 12-18 months have been cited as the next wave of downward pressure. These are primarily alt-A and prime borrowers.
The rates over the next 24 months WILL have an impact on these resets and WILL have an impact on whether or not foreclosure rates will continue to trend higher or start to flatten.

For example, ALT-A and Prime mortgages tied to the 1-year LIBOR with the typical 2.25% margin would rest currently at 6.75%.

[(former)FormerSanDiegan]

No, because long term rates don’t necessarily correlate to the Fed Funds rate.

However, the reset rates DO correlate with the Fed Funds rate. Mortgage resets over the next 12-18 months have been cited as the next wave of downward pressure. These are primarily alt-A and prime borrowers.
The rates over the next 24 months WILL have an impact on these resets and WILL have an impact on whether or not foreclosure rates will continue to trend higher or start to flatten.

For example, ALT-A and Prime mortgages tied to the 1-year LIBOR with the typical 2.25% margin would rest currently at 6.75%.

[(former)FormerSanDiegan]

No, because long term rates don’t necessarily correlate to the Fed Funds rate.

However, the reset rates DO correlate with the Fed Funds rate. Mortgage resets over the next 12-18 months have been cited as the next wave of downward pressure. These are primarily alt-A and prime borrowers.
The rates over the next 24 months WILL have an impact on these resets and WILL have an impact on whether or not foreclosure rates will continue to trend higher or start to flatten.

For example, ALT-A and Prime mortgages tied to the 1-year LIBOR with the typical 2.25% margin would rest currently at 6.75%.

[Author]

Posts