Weekly Mortgage Update
It’s all about ‘Quantitative Easing – Phase 2’ this week. The buzz word for this is ‘QE2’. In layman’s terms, it means the Fed would print more money with the thought that putting more money into the system will spur business expansion and thereby job creation. But it’s a fine balancing act between the short term need to keep the economy on track vs. the long term risk of damaging it. In the long term, QE2 would make rates rise because if you just print more money, eventually people start thinking that your money isn’t worth as much as it used to be and the dollar drops in value. This makes rates of return go up to compensate.
For now, the job numbers for September confirm that the economy, or the job market, is stabilizing and perhaps even improving slowly making the Fed less likely to start QE2. However, if the Fed thinks we’re headed south, the QE2 will set sail and the Fed will flood the banking system with even more money, and debt. The anticipation of this is what has brought rates back to their August 31st levels. But that is a line in the sand that we still (even today) have not been able to break through. So grab this opportunity. I don’t think it will get any better.
This week 30 yr. fixed rates ranged between 3.875 and 4.25% depending on program, credit and points. Have a great weekend!
Ted Clay
Sr. Loan Officer
NMLSR # 217991
OK License # MLO01963
Office: 405-341-8644
Cell: 405-826-1320
e-Fax: 1-866-208-5309
tclay@wrstarkey.com
www.TedClay.com