What's around the bend for interest rates?
Mortgages repriced for the worse this morning, and that's not a surprise in light of tomorrow's midterm elections. What you may not know is that this week has more than a little in the way of news that will affect interest rates. Here's what's happening this week in addition to the Midterm Elections:
1. The Federal Open Market Committee meets on Wednesday, the day after the midterm elections. The Committee is expected to announce a second round of Quantitative Easing.
In plain english, that means that the Fed is going to print more money with the hope that the banks who get it will lend it to you and me to buy stuff. It didn't work in 2008, but 10 out of the 12 members of the committee think that it might work this time, and that's the way the vote is likely to go.
'Why didn't it work,' you ask? When the banks get money for free (0-2%) there is nothing that requires them to re-lend the money. Instead, they've been using it to make other investments for their own accounts.
2. The Jobs Report will come out on Friday. Regardless of your political outlook on life, having 10% of the people in your town unemployed is not good for your local economy.
Initial Jobless Claims last week were 434,000.
If you're a REALTOR, I have a 3-point plan to help you sell houses between now and the end of the year:
1. Don't focus on interest rates. Time spent talking about something you can't control is time stolen from talking about what you CAN control: __________________________________ (you fill in the blank.)
2. Advise your clients not to focus on interest rates. Negotiating price on a purchase is much more powerful than worrying about whether rates will be lower or higher after the first of the year.
3. Get out your prospect list and call 10 more people today than you called yesterday!
I'm Mike in Tucson, your preferred Tucson Mortgage Lender.
SUNSTREET MORTGAGE llc ~ Correspondent Mortgage Bank
Offices (AZ) Mesa, Tucson, Nogales, and Albuquerque, NM.