Mortgage Rates Still On the Climb
Housing market cooling; interest rates rising. How the heck does that work?
You'd think with a cooling market there would be some room to let rates stabilize or even drop. Apparently not; the Fed is still whining about inflation. However, the Fed could be right -- and we can blame it on the price of oil and the ongoing desire of all oil-related companies to make as much money on their products as they can. While there are situations that are being blamed for the price of gas, including lack of oil refinery through-put as we come into the "peak" driving season, I think that the profits being announced by most oil companies would provide them with enough cash to increase their refining capabilities, wouldn't you?
Well, that might take the profits down from the double-digit range, and investors wouldn't like that, would they?
In the meantime, middle America is in the squeeze. Mortgage defaults are up. Where there are defaults, there are foreclosures. As I wrote in my last entry, foreclosures are predicted at staggering levels. Many aspects of the housing market are showing real stress, including housing materials and home sales.
Heck, I was writing on inflation just last week and said the Fed might raise rates. Looks like I could be right. We'll have to see what the next round of Fed guidance is like.
If you have been thinking about selling, I might just do that -- especially if you are going to downsize or think about renting for awhile. I think prices could experience even more downward pressure over the next couple of years. If you are thinking of buying, unless you have the deal of your life, I might just wait. I think the market still has room to fall before it picks up again.
With that sour note, I'm going to enjoy some early summer sunshine over the weekend, and see if I can find an upside for you by Monday.