Oh the belly-aching … Austin mortgage commentary
One of my favorite & top mortgage professionals commentary on today’s rates and who and why and what that means for the Austin home market. Read on …
Oh the belly aching going on! GM wants sub prime auto loans because they are losing too many sales…excuse me, that would be YOU and I funding the sub prime auto lending market. Our tax dollars bailed out the GMAC and we own it. Honda on the other hand, has a self funded lending arm and they CAN sell Hondas to the sub prime US auto market. I call that competition where one business has sufficient capital to compete. GM right your ship, and buy your company back, THEN attack the sub prime auto market if you can do so successfully!
And now China is concerned. China is losing ground in Europe because the Euro has fallen 17+% in relation to the dollar since Dec 2009 (all due to Greece). China fears losing their export business in Europe (they primarily peg their currency to US dollars).
OK enough already. How do these things impact mortgage rates? As business conditions weaken, flight to safety including mortgage backed securities holds our rates low. The article below talks about a .25% improvement in bond discount. This represents a very slight improvement in mortgage rates, so in essence we traded fairly flat last week in the bond market.
As you know I have been expecting rates to rise. The “world worries” seem to have the ability to hold our mortgage rates low. Lord knows our underwriting is a bear, so now we need to see home values stabilize. It all gets back to jobs, doesn’t it?
Don’t forget to kiss the ground in Austin!