Mortgate rate?

[anon1402]

Sorry I’m a newbie. Is it the general consensus that Jumbo mortage rates are normal, low or artificially low. It seems that with the record number of defaults and the asian countries with drawing over 50 bil in treasury notes that it would cost more to borrow money. I would also think that foreign investors would be frothing at the mouth that the US has purposely devaluated the dollar.

[XBoxBoy]

You would think so…

> 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.

[XBoxBoy]

You would think so…

> 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.

[XBoxBoy]

You would think so…

> 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.

[anon1402]

Thank you for your reply

[anon1402]

Thank you for your reply

[anon1402]

Thank you for your reply

[mgubnyc1]

Let’s not forget the fact that the housing bubble is not confined to the USA, it is happening all over Europe, and yes they also have record foreclosures!!
Bottom line is, in the long run America will pull out of this faster and for the stronger.

[mgubnyc1]

Let’s not forget the fact that the housing bubble is not confined to the USA, it is happening all over Europe, and yes they also have record foreclosures!!
Bottom line is, in the long run America will pull out of this faster and for the stronger.

[mgubnyc1]

Let’s not forget the fact that the housing bubble is not confined to the USA, it is happening all over Europe, and yes they also have record foreclosures!!
Bottom line is, in the long run America will pull out of this faster and for the stronger.

[Author]

Posts