While everyone's thinking of the holiday season, interest rates have crept back up. Six months ago, I predicted that rates could hit 6% by Christmas. They're not there yet, but the 10 year bond (an indicator of mortgage rate direction) today closed with a yield of 3.72%, the highest it's been since August. It's headed higher.
Realtors, give your buyers who are fence-sitting a dose of reality. Would they rather buy a home at today's price with a 5.375% mortgage, or hope that purchase prices decline somewhat, while low mortgage rates evaporate?
China's central banker, Deputy Governor Zhu Min, indicated last week that China is done buying US Treasuries. “When the U.S. has to fund its deficit through the combination of issuing more Treasuries and printing more dollars, it is inevitable that the dollar will continue to weaken,” he said. That will curb China's appetite for more US debt.
I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.