Watching mortgage rates, it's about mortgage bonds
Mortgage rates. What's the deal? Why are they historically low, is it the Fed? Why have California real estate prices risen so high? Is the California real estate bubble going to pop?
Almost everyone has a question about real estate, and it is very hard not to draw parallels to the bubble of the stock market. However, though there is speculative flipping in the housing market, especially in hot areas such as Southern California, land is more of an asset than the typical .com.
Naturally, this has caused competition for real estate, particularly in areas where massive growth from immigration is occurring and expected into the future. While people might not need the Internet, they do need a place to live.
Of course historically low mortgage rates have helped, but new mortgage packages and qualifying criteria are the real difference. ARMs, or loans with variable interest rates, have enabled home buyers to buy more house than would historically be affordable. Additionally, 20% down is not required, nor is perfect credit.
Thus, many believe that they can sell their home before their ARM becomes variable, or refinance before mortgage rates become too high - and everyone on an ARM should be thinking about this.
Watching the Fed definitely helps predict mortgage rates, but most real estate and financial analysts will tell you to watch mortgage bonds. Mortgage bonds, they say, much more accurately predict the action of mortgage rates.
If you financed your home with an ARM, or if you are planning to finance a home with an ARM, it might be in your interest to learn as much as possible about mortgage bonds.
Almost everyone has a question about real estate, and it is very hard not to draw parallels to the bubble of the stock market. However, though there is speculative flipping in the housing market, especially in hot areas such as Southern California, land is more of an asset than the typical .com.
Naturally, this has caused competition for real estate, particularly in areas where massive growth from immigration is occurring and expected into the future. While people might not need the Internet, they do need a place to live.
Of course historically low mortgage rates have helped, but new mortgage packages and qualifying criteria are the real difference. ARMs, or loans with variable interest rates, have enabled home buyers to buy more house than would historically be affordable. Additionally, 20% down is not required, nor is perfect credit.
Thus, many believe that they can sell their home before their ARM becomes variable, or refinance before mortgage rates become too high - and everyone on an ARM should be thinking about this.
Watching the Fed definitely helps predict mortgage rates, but most real estate and financial analysts will tell you to watch mortgage bonds. Mortgage bonds, they say, much more accurately predict the action of mortgage rates.
If you financed your home with an ARM, or if you are planning to finance a home with an ARM, it might be in your interest to learn as much as possible about mortgage bonds.
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