Mortgage Rates Improve with Weak Consumer Confidence

Yesterday we saw our market fall 11 ticks, which really singalled that we were in a downtrend which was likely to continue until some tape hit that stuck and affirmed our economy was not is as good of shape as the media likes to portray. Today we are currently up 10 ticks with investors returning to our market with consumer confidence way, WAY down.

Where we sit now consumer confidence was measured at 44.5, down from 59 last month. The media is already spinning this low number off as an effect of the debt debate fought last month. Perhaps there is some merit to this rationale, but in all sincerity the problem is far deeper and much more serious than they are willing to give credit.

This recovery today however does not mean we are out of the thicket. On the contrary, this upswing will definitely help rate and pricing but it alone is not enough to send us back into the low rate environment we all hope to see once again.

Unfortunately because the equities market is what most media outlets focus on, they also focus on how to get the equities market to post gains, which makes everyone feel warm and cuddly. Well, everyone but us who would like to see the long term markets rally which usually comes at the expense of equities. Why the long terriddle? Becuase as I type the media is doing everything in their power to push QE3, becuase it is their expectation that more money in the system means equities will post gains and they can feel warm and cuddly again at least for the time being.

Realistically QE3 could mean doom for our economy and markets as it forces the US dollar off a cliff and into oblivion to be remembered along with the Continental. This is the fear, and if the Fed is not careful, very soon we'll all be enjoying a 20 dollar loaf of bread along with our 10 dollar cup of coffee and 40 dollar gallon of gasoline. If this comes to pass, I assure you rates will no longer be in the 4s, or even the 5s, or 6s... Think days of Jimmy Carter - 16, 17, 18 percent.

Scary times we live in.

Which is why securing the right financing and locking in a low fixed rate now, while home loan interest rates are still in the low to mid 4s is literally one of the smartest financial decisions one can make at this point in time.

Post your questions, post your comments, call me crazy... time will sort all out.