Weekly Mortgage Update 2-16-08
Linda Lunsman of Princeton Capital writes:
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“CUTS LIKE A KNIFE, BUT IT FEELS SO RIGHT” Bryan Adams And financial pros will tell you it’s wise to never try and catch a falling knife. Seems like decent advice in general - but in the financial world, it means that when the price of a Stock or Bond is in the midst of a severe decline, be very cautious about stepping in to buy…even if it feels so right because the price starts to look cheap. That’s because when prices declines sharply, it often gets even worse, making it hard to call the bottom. That’s why many investors, who attempt to buy on the way down, say the feeling cuts like a knife. And over the past week - Bonds have been dropping much like a knife, and home loan rates have risen by about .25% across the board. |
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After a closed market on Monday, all of the coming week’s economic reports will be delivered on Wednesday and Thursday - but don’t expect that any volatility will be limited to those days. The inflation data and Fed Meeting Minutes could be real market movers. Since inflation erodes the value of the fixed return provided by a Bond, if the news of the week continues to reek of inflation - this could spell more bad news for Bonds and home loan rates. Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise… |
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Tags: Real Estate Finance · Real Estate Data · Real Estate
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