Bernanke Leaves Clues About the Future of Mortgage Rates, What is Your Best Guess?

Ben Bernanke Leaves Clues About The Future Of Mortgage Rates

On the 1-year anniversary of the Lehman Brothers collapse (CAN YOU BELIEVE IT HAS ALREADY BEEN A YEAR), Fed Chairman Ben Bernanke said Tuesday that the "recession is very likely over at this point".

His comments were supported by a Retail Sales report for August that was much better-than-expected.

Equities improved on the day, mortgage markets worsened, and Renton home affordability suffered.

The days of ultra-low Renton mortgage rates may be coming to an end.

Since last September, mortgage bonds markets have been in Rally Mode. As the Financial Crisis of 2008 worsened, investors fled the relatively risky world of stocks and moved dollars into safer investments like cash and bonds -- including the mortgage-backed kind.

Risk aversion is common when market uncertainty exists but last year's aversion was so strong that, by late-November, it had forced mortgage rates down to an all-time low.

Since November, however, rates have been on the rise. Stronger economic data and a NATIONAL general feeling of optimism have helped stock markets recover and some of those gains are coming at the expense of low mortgage rates.

Therefore, if you're wondering what mortgage rates might do going forward, listen to the words of the Federal Reserve Chairman. If he sees economic recovery ahead, it's probably going to happen.

It should spell higher mortgage rates into 2010. In fact my guess is rates will be in the middle 6's by next summer. And my personal opinion is that the economic slowdown-recession-depression or whatever you want to call it in the Puget Sound is not over. It is going to be another year or two and many local families are going to struggle. Our area entered the depression late and we may be the last to come out of it.

Give us your thoughts about the local economy and we will talk about the Renton Real Estate economy. The old adage, as most are, is true "Real Estate is Local".

Our thoughts from the Gary McNinch Team Renton Realtors.

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Gary McNinch Team Realtor Renton WA Real Estate Keller Williams Realty Renton WA. Call us 206-696-2329, email Gary@GaryMcNinch.com Serving Renton, Kent, Auburn, Newcastle, Skyway, Fairwood, Renton Highlands and Kennydale tweet us, text us, or send us a snail mail. We like to hear from our many satisfied clients.


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