From one of our clients, but this question could have been written by a thousand of them!
Since you are more in the loop than I am, can you tell me what effected the bond market so much that we had a huge
deterioration in pricing today?
Here is my answer….
Predicting the direction of rates is just as difficult as predicting the direction of the stock markets, oil or gold. These markets have a life of their own. But consider the news we have had lately…
a. Good jobs report—on Friday.
b. The Fed was a little more optimistic in their analysis of the economy in their statement—Tuesday. And these means that purchasing mortgages is going to be less of a priority.
c. Bond holders agreed to the Greek deal on Friday.
d. Retail sales were up on Tuesday.
e. Most banks passed the stress test –announced Tuesday
f. The stock market had huge gains Tuesday.
Bottom line, as I have been saying all along—as the economy recovers rates will go up. However, there still are plenty of headwinds…but there is also definitely momentum. Remember, rates dropped last year and they were already low because there was a risk of a double dip recession. That is going away. As the threat of recession becomes a distant memory–so should that the last drop in rates.
Of course, any shock to the system could change things overnight.
If you are a loan officer—you should be focused on purchases, always. We have a webinar coming up in two weeks. March 28. Targeting Realtors to Increase Your Purchase Market Share. All trial members of our Marketing System will be invited. www.OriginationPro.com.