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‘A Falling-Rates Environment’
Should've bought last month!
There's a misconception out there among a lot of would-be American homebuyers and, unfortunately, a lot of industry professionals too, that mortgage rates are destined to fall further given that the Fed's destined to deliver a series of additional rate cuts. "We're in a falling-rates environment." That's the phrase you'll hear.
I said this last week, and I'll say it again: If I had to guess, I'd say mortgage rates will be lower this time next year than where they a
Rates will be lower as short rates come down, the basis between intermediate ust bonds and mortgages will narrow. It will take time and rates will fluctuate but in 1-2 years the best bet will be that they will decline.
It appears that current homeowners are not waiting for lower rates to refinance. This statistic astonished me.
Homeowners haven’t drained cash out of their houses this fast since 2008 – MarketWatch
derek- add this to rising delinquencies on credit cards and small business loans, underwater vehicles purchased at market highs, inflation still persistent for many items and services, labor strength/rising wages, and you get a recipe for what’s next. The homeowner’s draining cash are what’s left of the middle/upper middle class that cannot afford their lifestyle without using their “equity” like a piggy bank (while their homes are still NOT underwater). It’s just a matter of time before all that equity is either used up, or the market snatches it away, at which point lots of property will be coming to market as homeowners are forced to sell, or they walk away.
H-Man, I don’t think falling rates are over – a pause occurred due to a “no one saw it coming” employment report. If employment resumes its fall, rates will follow. That being said, it make take a while.