Economy At Risk - Mortgage Rates Rising

October 9, 2008

As we enter this year’s fourth quarter, the economy is teetering on a dangerous precipice - a situation that’s particularly ominous with the failure of House members to pass the huge bailout bill (the Emergency Economic Stabilization Act of 2008). This act could have had a major impact on the mortgage market, helping to fund future loans and keeping distressed homeowners in their homes.

Here’s what John Courson, chief operating officer of the Mortgage Bankers Association, had to say: "We hope Congressional negotiators will regroup and find common ground upon which they can build a new agreement. Restoring liquidity to the credit markets is crucial to keeping our economy moving forward."

Meanwhile, mortgage rates are on the rise. "Mortgage rates are following Treasury bond yields amid market uncertainty over the current state of the economy," said Frank Nothaft, Freddie Mac vice president and chief economist. Treasury yields rose about 0.3 percentage points during the last week in September, and 30-year fixed-rate loans moved up about the same amount. While up, interest rates for 30-year fixed-rate mortgages are still more than 0.5 percentage points below this year’s peak of 6.63 percent set the week of July 24th.

source: Jim Woodard

Posted in Lending, Real Estate