Rate Update October 27, 2008
Mortgage rates are sharply higher from Friday morning.
A lack of confidence of the health of the global economy is hurting all asset classes again this morning. In Friday’s rate update I spoke about the impact that margin calls are having on mortgage rates.
Stock markets in Asia and Europe traded lower overnight putting further pressure on hedge funds and large institutional investors to sell traditionally “safe” investments to raise capital to cover margin calls and shareholder redemptions.
This week the Fed is scheduled to announce their interest rate decision on Wednesday. The markets are expecting a .50% cut but some analysts believe a .75% cut is likely. Please remember that a cut to short-term rates DOES NOT necessarily translate into lower mortgage rates.
Current outlook: locking