Mortgage Rates Edge Up, Slowing Home Refinancing

[NNN0LHI]

http://ap.tbo.com/ap/breaking/MGA5EWK5ZMD.html

WASHINGTON (AP) - Mortgage rates around the country edged up this week, contributing to a slowdown in home refinancing.

For the week ending Nov. 14, the average rate on 30-year mortgages rose to 6.03 percent, up from 5.98 percent the previous week, mortgage giant Freddie Mac reported Thursday in its weekly nationwide survey of mortgage rates.

In mid-June, rates on 30-year mortgages slid to 5.21 percent, the lowest level in more than four decades. Since then, rates on these benchmark mortgages have bounced up and down.

For 15-year mortgages, a popular option for refinancing, rates increased to 5.39 percent from 5.31 percent last week. Rates for one-year adjustable mortgages averaged 3.76 percent, up from last week's 3.73 percent.

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[ret5hd]

1. this is just the start...

mortgage rates will soon be at 10%-12% or higher.

auto loans 15%-20%

unsecured (CC) debt 30% +

[HFishbine]

3. Agreed

Just the start.

People have it wrong when they think the economy might not be an issue next year. It might not be as far as growing GNP, but inflation will be Bush's bugaboo. It won't come from competition for labor, which will stll be plentiful, but from competition for capital as deficit spending takes its toll (which will also put stocks in another dive probably as soon as January/February, 2004).

I'm not so pessemistic as to see mortgages at 10 - 12% "soon," at least not before the election. But 8 to 8.5% by next October seems possible -- and that will be enough for people to "get" the implications of Bush's fiscal policy.

[Instant Karma]

8. If one wishes to transfer real property to other interests

it makes sense for this to occur. Make credit more difficult to obtain, people lose homes, the rich pick them up. Almost a repeat of Poppy's deal with the uber wealthy sustituting the role of the RTC.

[Tansy_Gold]

13. I've been warning of this for about three years, and I think. . . .

. . . .Paul Krugman has, too.

I live in the mushrooming "west valley" outside Phoenix. Houses are going up literally overnight. By the thousands. This boom started about five years ago and shows no sign of slowing.

HOWEVER, many of the homes have been sold on 0-down packages, to people who are living on the financial edge. Any slight dip in their income is a disaster. And they have no equity cushion.

These are not refinancers, for the most part. These are people who are sinking everything they have into housing, hoping to build some equity rather than pay rent. (There were a lot of new apartment complexes built/begun just about a year before the housing developments. Many of those complexes now have big banners draped on their walls with bargains like "Free rent for a year!")

A friend bought one of these homes a little over a year ago, in a brand new development. Within DAYS of her move-in, she noticed the for sale and for rent signs going up. She also learned that several of the homes on her street were owned by absentee landlords/speculators.

The development nearest my house is less than six months old. There are already "for sale" signs tacked to the telephone poles.

After the banks have gotten the down payment (if any) and a few mortgage payments, the failure of the homeowner to pay leaves the field open for speculators, and they are the ones with lots and lots of money. As they buy up housing -- which is the absolute foundation of the American dream -- can the end be far?

[jiacinto]

6. Don't scare me

I hope that that does not happen.

[wryter2000]

2. Ooops

Low mortgage rates are all that's been keeping us out of a depression.

[yella_dawg]

9. Yeah

the jobless recovery was financed by home equity loans. Looks like ramen noodle time.

[depakid]

4. Tick Tock

Bond market implosion on the horizon?

[Media_Lies_Daily]

5. What a great idea!! Let's destroy the only part of the economy...

...that's doing well.

And after we get that little ball rolling, let's bring back the draft!!

Yippeee!!

[cliss]

7. I have no reason to doubt you, Ret5hd.

What are the implications?

a) if you have an adjustable rate mortgage (ARM): quick, check out your paperwork and see what could happen.

b) hurry up and pay off those credit cars. I don't use mine anymore; I just use the debit card (very sparingly).

c) try to save up enough so you can buy a car with cash, rather than take on payments.

d) try to live below your means, because I believe the shit's going to hit the fan.

[catmandu57]

10. The ARM is what's going to do a lot of people in

I noticed on one of the national mortage cos. advertisement that the refinance was an ARM, I don't know how many others are doing this, but when people discover the 6% they refinanced is now 9%. Man it's going to hit the fan.

[bleedingheart]

11. Look out! Those who took variable mortgages may be in a pickle

i know a few of my acquaintances who overextended to buy more stuff to put in there 4000sq ft homes....they may find themselves having to sell it all off if they can to make payments.

[Noordam]

12. The problem being is how many 4000 sq houses can

hit the market at the same time, because a lot of "smart" buyers all did the same thing.....