Tuesday, December 29, 2009

Mortgage Rates Forecast to Head Back to 8% in 2010

Article from Bloomberg (via Rolfe Winkler):

Dec. 28 (Bloomberg) -- If Morgan Stanley is right, the best sale of U.S. Treasuries for 2010 may be the short sale.

Yields on benchmark 10-year notes will climb about 40 percent to 5.5 percent, the biggest annual increase since 1999, according to David Greenlaw, chief fixed-income economist at Morgan Stanley in New York. The surge will push interest rates on 30-year fixed mortgages to 7.5 percent to 8 percent, almost the highest in a decade, Greenlaw said.

We are not close to a bottom in home prices, especially in Sonoma County where we have more Option-ARMs than almost anywhere in the country. Major resets/recasts begin next year.

And there is little doubt that mortgage rates heading higher will push housing prices lower across the board. Buyer beware.

1 comment:

  1. Do not forget that our county is broke even ignoring the pension obligations.One way or another Real Estate Taxes will go up although they will likely be called something else.Don't agree? the UC system is barred from charging tuition...they charge fees instead,BOHICA.

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