Rates are modestly higher this morning following.
After four straight days of sell-off in the mortgage-backed bond market, which has caused mortgage rates to rise by approximately .25%, we may begin to see a reversal.
Potentially helping rates is a weaker stock market (to understand dynamic between stocks and mortgage rates click here). The Dow Jones Industrial Average is currently trading over 100 points lower after a slew of financial firms reported worse than expected quarterly losses (Freddie Mac, Axa, Barclay’s, & AIG).
In real estate news, zillow.com reported results from a recent survey they did of homeowner’s that had interesting results. Their 2nd quarter survey showed that out of 1,361 homeowners 62% said they believed the value of their home increased over the previous year. However, according to zillow.com data 77% of homes in the US depreciated. This unusual optimism may help explain why obtaining price reductions from home sellers can be difficult.
For now we will recommend a neutral position with a floating bias.