Mortgage Rates And Oil Prices Going Down (Mortgage rates are slowly falling and the reason behind it is not what many analysts and experts originally thought. )
In fact, the cause of the falling rates has nothing to do with the real estate or mortgage worlds at all.
Borrowers and potential borrowers alike can thank the falling oil prices for causing mortgage rates to keep on going down.
A September 15, 2006 article by Lou Barnes of Inman.com, “Falling oil prices bring down mortgage rates,” discusses the good news for borrowers.
“Long-term interest rates are sitting on a six-month low, the 10-year T-note at 4.75 percent and low-fee 30-year mortgages at 6.5 percent. The reasons that these rates are so low are not the widely advertised pre-recession or housing collapse.”
“The biggest recent help to long rates is the authentic collapse in commodity prices: oil is $62.70 this morning, natural gas $4.85 (10 bucks below last winter), wholesale gasoline $1.53 (which should put retail at $2.20 or less within two months), and gold is in freefall at $573 (down from $730 in May).”
This news of lowered prices for oil means good news not only for consumers, but for our economy and inflation as well. With all of the bad news swirling about the slowing housing market, good news in terms of mortgages and oil is just what the American public needs.
Many households across the U.S. have been feeling the pinch of higher mortgage rates and even higher gas prices, so this should come as a welcome relief for pretty much every consumer.
Now that these tow things are looking up, we must look to see what is going to happen with the housing market.
“Housing is slowing, no question, its past stimulus fading to nil, but housing trouble will not exert drag unless waves of foreclosures result in a price spiral. The newest foreclosure and loan-delinquency data do not support the scare headlines, and there is widespread misunderstanding about the process of a housing slowdown.”
If you haven’t noticed, foreclosures have been dominating in the news lately, as many are beginning to worry that a wave of them are in our near future, but this may not exactly be the case.
Some foreclosure companies, such as RealtyTrac, have been making headlines lately saying that the amount of foreclosures has been increasing at an alarming rate, while foreclosures.com is saying that things are not that bad.
I guess we will just have to wait and see.
“Who is right -- or most descriptive? The Mortgage Bankers Association's study of 42 million loans confirms Foreclosure.com's picture: current-quarter delinquent payments and foreclosures are unchanged from last spring. To understand why a rapid slowdown is sales is not causing widespread distress, it's necessary to think through the mechanics of a slowing housing market.”
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