Mortgage Report: Week of April 17th - 21st
Speculative buying has driven housing prices to nosebleed levels -- giving rise to fears that there's a bubble and that rising interest rates will be the pin that makes it explode. However thirty-year mortgages are still pretty low, interest rates aren't spiking; the economy is still relatively robust, and the job market remains solid. At most, we're going to get two more moves from the Fed. So rates get up to the 6 3/4% to 7% range on mortgages and, as a result, we think the market stabilizes. The Fed will stop short of crippling the housing market. They simply want to slow it down. For this week expect the Fed to release the minutes of it's most recent meeting and if they are overly concerned rates won't react well and you can expect more Fed hikes soon. It's employment that really counts. The underlying fundamentals of real estate are still very positive. Job creation and household formation drive housing.
