Sunday, June 17, 2007

Interest Rates Jump but Signs Persist for Growth

In his current newsletter, our Century 21 Gemini Mortgage guru, Freddie Torres, has weighed in on the latest jump in rates:
"Up, up, and away – and we're not talking about balloons. We're talking about interest rates, mortgage rates in particular. Indeed, rates soared across both duration and type last week, with the 30-year fixed-rate mortgage adding 21 basis points to average 6.74% (the highest it’s been since last July)"
Yet there's still reason for some optimism...." In fact, many economists believe that a positive curve indicates that investors expect strong future economic growth. The key is for rates not to rise too far, too fast, and for short-term rates (if not the general level of rates) to ease.
Speaking of rate easing, the odds favor a pullback in mortgage rates after the recent rise, particularly in light of Friday's favorable CPI report."

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