{"id":6049,"date":"2008-12-11T07:00:09","date_gmt":"2008-12-11T14:00:09","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=6049"},"modified":"2008-12-11T06:58:10","modified_gmt":"2008-12-11T13:58:10","slug":"if-mortgage-rates-are-not-going-below-5-where-are-they-going","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6049\/if-mortgage-rates-are-not-going-below-5-where-are-they-going\/","title":{"rendered":"If Mortgage Rates Are Not Going Below 5%, Where Are They Going?"},"content":{"rendered":"

There was an interesting post yesterday asking Why Won’t Mortgage Rates Drop Below 5%?<\/a>.\u00a0 Brian Brady answered the question with a supply and demand analysis and as usual, I cannot disagree with that reliable old tool (the supply and demand analysis… not Brian \ud83d\ude42 ).\u00a0 But I wonder, is there more at work here than supply and demand?\u00a0 Reading his post reminded me of something I have been telling my clients lately and meaning to share with everyone else:\u00a0 Belief<\/em> runs the show.\u00a0 I suggest that Belief & Fear have supplanted Supply & Demand as our modus operandi<\/em>.<\/p>\n

The markets of late are moving as much on belief as they are on fundamentals.\u00a0 Don’t get me wrong; I’m not complaining.\u00a0 At least fundamentals is a player again.\u00a0 For the last couple of years the markets based their valuations on leverage, blind optimism and a smug sense of higher intellect – all the while recording profits in the sand.\u00a0 It is kind of nice to see some fundamental analysis come back into vogue.\u00a0 But we do not relinquish old habits easily.\u00a0 If I believe<\/em> that ABC Company will (or should) profit ten cents per share, I will pay a price based on that belief – almost as if the profits were already announced.\u00a0 This, of course, is what leads us into the strange world of Wall Street where a company’s shares can get whacked even after they announce record earnings IF their earnings turn out to be less than I<\/em> thought they should<\/em> be.<\/p>\n

What does all this have to do with mortgage rates?\u00a0 The fed has hinted at buying down mortgage rates using various tools at their disposal.\u00a0 The market has now partially priced this belief<\/em> into the mortgage backs.\u00a0 Rates are down, at least to some degree, because the market believes they will drop even lower<\/em>.\u00a0 Once again, we equate assumptions with knowledge.\u00a0 I don’t mind it up to a point; and here’s the point: lately I have had more than one client elect to wait on their purchase (or at least their purchase mortgage) because they want a piece of that Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

There was an interesting post yesterday asking Why Won’t Mortgage Rates Drop Below 5%?.\u00a0 Brian Brady answered the question with a supply and demand analysis and as usual, I cannot disagree with that reliable old tool (the supply and demand analysis… not Brian \ud83d\ude42 ).\u00a0 But I wonder, is there more at work here than […]<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-6049","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":4971,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/4971\/bloodhound-blog-radio-fundamentals-trumping-headline-risk\/","url_meta":{"origin":6049,"position":0},"title":"Bloodhound Blog Radio: Fundamentals Trumping “Headline” Risk","author":"Brian Brady","date":"October 15, 2008","format":false,"excerpt":"Sean \"Rocky\" Purcell and I discussed his big prediction of the stock market bounce and I repented for my recommendation to stay \"unlocked\" in hopes of lower mortgage rates. Download and enjoy this light-hearted 17 minute show We felt the near-term future for stock and bond markets would depend on\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6014,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/6014\/why-wont-mortgage-rates-drop-below-5\/","url_meta":{"origin":6049,"position":1},"title":"Why Won’t Mortgage Rates Drop Below 5% ?","author":"Brian Brady","date":"December 10, 2008","format":false,"excerpt":"Mortgage-backed securities have been on a tear, improving more than a half a point in the last week.\u00a0 This means that the 5.25% rate, offered at 1 point last Friday, should be offered at a half a point today....BUT.... ...that isn't the case at all.\u00a0 Mortgage rates may very well\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":16296,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/16296\/can-bernanke-keep-mortgage-rates-this-low-into-2015\/","url_meta":{"origin":6049,"position":2},"title":"Can Bernanke Keep Mortgage Rates This Low Into 2015?","author":"Brian Brady","date":"April 1, 2013","format":false,"excerpt":"I've been a vocal critic of Ben Bernanke.\u00a0 I thought his Quantitative Easing schemes would eventually create a bubble in the Treasury and mortgage-bond markets.\u00a0 Bernanke has committed to keeping rates low for another 18-24 months. I was wrong.\u00a0 I violated the first rule of market prognostication (from the late\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5465,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5465\/why-i-think-the-jobs-report-wont-be-helpful-for-mortgage-rates\/","url_meta":{"origin":6049,"position":3},"title":"Why I think the Jobs report won’t be helpful for mortgage rates….","author":"Tom Vanderwell","date":"November 7, 2008","format":false,"excerpt":"Okay, let's face the fact that the jobs reports and the reports from Ford and General Motors that came out today were ugly.\u00a0\u00a0 Not just ugly, downright nasty. In normal economic times, that sort of bad economic news would send people fleeing stocks and going into the bond market.\u00a0\u00a0 That\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":5071,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/5071\/mortgage-market-week-in-review-12\/","url_meta":{"origin":6049,"position":4},"title":"Mortgage Market Week in Review","author":"Tom Vanderwell","date":"October 17, 2008","format":false,"excerpt":"Well, here we are and it\u2019s time for another Mortgage Market Week in Review.\u00a0\u00a0 This week, we\u2019re going to talk about consumer spending, consumer confidence, the new normal, where\u2019s the bottom?\u00a0and why interest rates have had a 1 percent up and half percent down swing since last week Wednesday. Consumer\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":14866,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/14866\/could-mortgage-rates-drop-after-a-treasuries-credit-ratings-downgrade\/","url_meta":{"origin":6049,"position":5},"title":"Could Mortgage Rates DROP after a Treasuries’ credit ratings downgrade?","author":"Brian Brady","date":"July 29, 2011","format":false,"excerpt":"The dictated debt limit deadline looms and a credit rating downgrade, to US Treasury securities and agency mortgage-backed securities, seems likely.\u00a0 Naturally, a spike in treasury yields is expected and a subsequent rise in mortgage rates should follow. \u00a0 That's right out of the senior year textbook, in most American\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/6049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=6049"}],"version-history":[{"count":13,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/6049\/revisions"}],"predecessor-version":[{"id":6062,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/6049\/revisions\/6062"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=6049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=6049"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=6049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}