Today there were significant concerns that the efforts to turn the markets around and help the credit crisis are going to take a while. Fed Chair Ben Bernanke spoke on the economy and said that even if confidence returns, we will still need quite a while to recover from this crisis. This lead to another huge sell off on Wall Street and the Dow dropped 733 points. Those who were excited about the previous few days and the prospect of having hit bottom have renewed fears.
On a positive note, mortgage rates improved slightly. Out investors are offering 30 year fixed rates from 6.625% to 7% at the moment. A far cry from the 6% we had only a week ago. We are going to sit tight and hope the improvement continues before locking in. We have to be careful though, because there was some bad news about rising inflation today as well. Mortgage rates are based on a type of bond called Mortgage Backed Securities. Since inflation is bad for the long term performance of bonds, mortgage rates rise with inflation.
The election is getting closer and closer. Tonight is the 3rd and final presidential debate. I'm looking forward to seeing what the candidates have in store. The outcome of the election is obviously weighing heavily on everyone's minds since the policies of the winner will have a huge impact on the economy as well.
By Ronny Loew - Ronny is the Next Home Specialist with MN Home Loan Partners. Whether you are moving up, downsizing, relocating or keeping your home as an investment and buying a new primary residence, Ronny has specific strategies to make it easy and a financial win. He can be reached at 952-808-2815 or rloew@houseloan.com
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