Homeowners Competing With US For Loans
I wonder if high rates has something to do with the fact that the US Govt. competing in the marketplace for loans will cause money to be very scarce. One way the US borrows money to fund obligations is to issue treasury bonds. These bonds are bought by people seeking the relative safety of US I.O.U.'s.
Catch 22
California has just gotten through its billion dollar crises by issuing short term obligations to fund its operations until tax time. These kinds of Govt activities pull a lot of money out of the system, leaving less for business and for other borrowers, including homeowners. We are in a catch 22 in that we need to borrow to fund lenders so that they will begin to lend, But that very operation takes money out of the system making loans more expensive and harder to get.
I wonder if high rates has something to do with the fact that the US Govt. competing in the marketplace for loans will cause money to be very scarce. One way the US borrows money to fund obligations is to issue treasury bonds. These bonds are bought by people seeking the relative safety of US I.O.U.'s.
Catch 22
California has just gotten through its billion dollar crises by issuing short term obligations to fund its operations until tax time. These kinds of Govt activities pull a lot of money out of the system, leaving less for business and for other borrowers, including homeowners. We are in a catch 22 in that we need to borrow to fund lenders so that they will begin to lend, But that very operation takes money out of the system making loans more expensive and harder to get.
30-year fixed-rate mortgage: Averaged 6.46 percent with an average 0.6 point for the week ending October 16, 2008, up from last week when it averaged 5.94 percent. Last year at this time, the 30-year fixed-rate mortgage averaged 6.40 percent. This week's increase of 52 basis points was the largest weekly increase since the week ending April 17, 1987.
15-year fixed-rate mortgage: Averaged 6.14 percent with an average 0.6 point, up from last week when it averaged 5.63 percent. A year ago at this time, the 15-year fixed-rate mortgage averaged 6.08 percent.
Five-year Treasury-indexed ARMs: Averaged 6.14 percent this week, with an average 0.6 point, up from last week when it averaged 5.90 percent. A year ago, the 5-year ARM averaged 6.11 percent.
One-year Treasury-indexed ARMs: Averaged 5.16 percent this week with an average 0.6 point, up from last week when it averaged 5.15 percent. At this time last year, the 1-year ARM averaged 5.76 percent.
Thanks for Reading
Howard Bell
www.yourpropertypath.com
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