From Phil Winfrey, Plaza Mortgage Consultant
Why are we seeing lower rates when we've been told to watch for increases? After the government ended their mortgage purchases it was thought that we'd see higher rates quickly. The reason they haven't gone up has something to do with "Naked Short Selling". First it was Germany and now other European nations have decided to ban this practice of "seeking to profit from an expected fall in the price of an asset by selling shares you don't own without borrowing or making arrangements to borrow".
Because of this ban, traders and investors feel that these measures are to avoid an even sharper decline in the global stock markets. When markets are uncertain or worried, money seeks a safe haven and that has been the U.S. Bond market. That drives mortgage rates down.
Home buyers continue to have a reason to buy now and that's a real gift for all. Who knows how long it will last. Long term rates are in the 4's and 5/1 ARM's are in the mid 3's! With mortgage applications down 27% last week to a 13 year low we need the gift of low rates to continue! Let your buyers know that going naked in Europe has been banned and they need to buy a house! They'll know what you mean.
Let me know if you'd like to see what this looks like in an estimate or if a financing flyer would be helpful for your open house. Thank you for your support!
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