Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates-Commentary ~ September 13, 2013
Very little that is likely to really change the direction of interest rates or to add much force to current trends—was evident in this past week’s indicators. Indeed, there was a gentle settling taking place in most markets. Gold, for example, whose price rises when fears for the credit markets and for currency exchange rates send world investors to safe havens to protect their wealth, actually eased slightly. The cost of Brent crude oil also declined, an indication that effects of the huge political uncertainties in the Middle East have been blunted somewhat—a viable indication if for no other reason than that nothing dramatic has transpired in the many stand-offs the Syrian mess has created. (There are no sure solutions in sight, but world investors seem to be indicating that we’re not on the edge of a devastating outbreak of violence that would prove terribly upsetting to the markets.)
The U.S. dollar, largely as a result of the relative calm, has remained strong against other currencies. Interest rates, though, continue their rather difficult pattern, with the short-term Treasury security (the 6-month T-bill) shaving its yield all the way down to 0.04%–virtually nothing, especially when we factor inflation into the picture. By way of contrast, the 10-year T-note gained 10 basis points, as if in expectation of further upward pressures at the long-term end of interest rates. The credit markets seem to be making it clear that mortgage rates are unlikely to decline much below 4.5%–and so, for the moment, 4.5% seems to be the cellar floor, roughly speaking, for interest rates.
Investors appear to be on the alert for signs that rates may break higher. But the indicators give little impression that rates are likely to rise or fall significantly at any time very soon. They already have risen, taking refi mortgage applications much lower.
Still, there is much reason to watch the unpredictable short-term rates, which surely will need to offer a meaningful yield at some point, rather than continuing to demand a price for a short-term storage locker for investors’ wealth, and longer-term rates, which are keeping us all worried about a possible rate spike and the roiling that could occur in the mortgage markets as a result.
It’s a quiet time, perhaps, but still waters do run deep.