What if interest rates go to 13%?

[peterb]

take a quick read at this ,Breeze. It seems like a pretty good forecast for Mortgage rates to rise:

http://www.howestreet.com/articles/index.php?article_id=7751

[jpinpb]

Thanks for posting the site. I passed it along to others. I hadn’t thought about the relationship of the bond to rates. More troublesome is that our government didn’t think of that.

[jpinpb]

Thanks for posting the site. I passed it along to others. I hadn’t thought about the relationship of the bond to rates. More troublesome is that our government didn’t think of that.

[jpinpb]

Thanks for posting the site. I passed it along to others. I hadn’t thought about the relationship of the bond to rates. More troublesome is that our government didn’t think of that.

[jpinpb]

Thanks for posting the site. I passed it along to others. I hadn’t thought about the relationship of the bond to rates. More troublesome is that our government didn’t think of that.

[jpinpb]

Thanks for posting the site. I passed it along to others. I hadn’t thought about the relationship of the bond to rates. More troublesome is that our government didn’t think of that.

[jpinpb]

ok peter. Someone gave me a different point of view:

“I don’t agree that government action was to primarily lower mortgage rates, it was to provide liquidity for businees borrowing and lower LIBOR.

I think primary reason bonds are falling and yields are increasing is the very real prospect of default and recognition of higher risk. Private firms as well as municipalities like NYC have greatly decreased revenues that mean they may not to be able to service their debt.

You forget that “bailout” loans will be to purchase securities at a discounted rate where there is no existing market. The purchse is offset by the value of the securities.”

[jpinpb]

ok peter. Someone gave me a different point of view:

“I don’t agree that government action was to primarily lower mortgage rates, it was to provide liquidity for businees borrowing and lower LIBOR.

I think primary reason bonds are falling and yields are increasing is the very real prospect of default and recognition of higher risk. Private firms as well as municipalities like NYC have greatly decreased revenues that mean they may not to be able to service their debt.

You forget that “bailout” loans will be to purchase securities at a discounted rate where there is no existing market. The purchse is offset by the value of the securities.”

[jpinpb]

ok peter. Someone gave me a different point of view:

“I don’t agree that government action was to primarily lower mortgage rates, it was to provide liquidity for businees borrowing and lower LIBOR.

I think primary reason bonds are falling and yields are increasing is the very real prospect of default and recognition of higher risk. Private firms as well as municipalities like NYC have greatly decreased revenues that mean they may not to be able to service their debt.

You forget that “bailout” loans will be to purchase securities at a discounted rate where there is no existing market. The purchse is offset by the value of the securities.”

[jpinpb]

ok peter. Someone gave me a different point of view:

“I don’t agree that government action was to primarily lower mortgage rates, it was to provide liquidity for businees borrowing and lower LIBOR.

I think primary reason bonds are falling and yields are increasing is the very real prospect of default and recognition of higher risk. Private firms as well as municipalities like NYC have greatly decreased revenues that mean they may not to be able to service their debt.

You forget that “bailout” loans will be to purchase securities at a discounted rate where there is no existing market. The purchse is offset by the value of the securities.”

[jpinpb]

ok peter. Someone gave me a different point of view:

“I don’t agree that government action was to primarily lower mortgage rates, it was to provide liquidity for businees borrowing and lower LIBOR.

I think primary reason bonds are falling and yields are increasing is the very real prospect of default and recognition of higher risk. Private firms as well as municipalities like NYC have greatly decreased revenues that mean they may not to be able to service their debt.

You forget that “bailout” loans will be to purchase securities at a discounted rate where there is no existing market. The purchse is offset by the value of the securities.”

[Running Bear]

Gents,

I believe trying to determine the effects of interest rates, tighter lending standards, etc on home prices becomes very easy when you just look at monthly payment. People buy based on monthly payment and whether they can afford that payment.

During the boom we saw more and more creative lending to keep the monthly payment disproportionately low in relation to the purchase price. Toward the end we saw negative am loans take this to the absolute limit. I remember when I heard that neg am loans were being advertised that the top was very near. The housing downturn is going to be much longer then most people expect and will remain low for a long time. Think in terms of an L shaped recovery vice a V shaped one.

My2Cents

[Running Bear]

Gents,

I believe trying to determine the effects of interest rates, tighter lending standards, etc on home prices becomes very easy when you just look at monthly payment. People buy based on monthly payment and whether they can afford that payment.

During the boom we saw more and more creative lending to keep the monthly payment disproportionately low in relation to the purchase price. Toward the end we saw negative am loans take this to the absolute limit. I remember when I heard that neg am loans were being advertised that the top was very near. The housing downturn is going to be much longer then most people expect and will remain low for a long time. Think in terms of an L shaped recovery vice a V shaped one.

My2Cents

[Running Bear]

Gents,

I believe trying to determine the effects of interest rates, tighter lending standards, etc on home prices becomes very easy when you just look at monthly payment. People buy based on monthly payment and whether they can afford that payment.

During the boom we saw more and more creative lending to keep the monthly payment disproportionately low in relation to the purchase price. Toward the end we saw negative am loans take this to the absolute limit. I remember when I heard that neg am loans were being advertised that the top was very near. The housing downturn is going to be much longer then most people expect and will remain low for a long time. Think in terms of an L shaped recovery vice a V shaped one.

My2Cents

[Running Bear]

Gents,

I believe trying to determine the effects of interest rates, tighter lending standards, etc on home prices becomes very easy when you just look at monthly payment. People buy based on monthly payment and whether they can afford that payment.

During the boom we saw more and more creative lending to keep the monthly payment disproportionately low in relation to the purchase price. Toward the end we saw negative am loans take this to the absolute limit. I remember when I heard that neg am loans were being advertised that the top was very near. The housing downturn is going to be much longer then most people expect and will remain low for a long time. Think in terms of an L shaped recovery vice a V shaped one.

My2Cents

[Author]

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