by Michael Caputo, Starkey Mortgage
mcaputo@starkeymtg.com | 912-658-2366
The
long version:
The
turmoil in Europe has been positive for US mortgage rates for two main reasons.
First, economic growth in the region has slowed, which reduces future
inflationary pressures. In addition, investors have responded to the
uncertainty by shifting to relatively safer assets, including US
mortgage-backed securities (MBS). The economy of Greece is very small, but the
increasing possibility that Greece will exit the EU calls into question the
stability and the benefits of the monetary union, causing a wide range of
problems outside of Greece. Bond yields in other troubled European countries
have risen, creating a further drag on economic growth. People are beginning to
withdraw their money from banks in these countries, increasing the risk of bank
failures. Europe's issues will not be resolved quickly and will continue to
influence US markets for quite a while.
Focus on the rate that is now available as
opposed to rushing the buyer to act before it goes up. Few thought we would see
these levels and there is no way to be sure how long it will last. Build your
buyer’s confidence about the ability to secure the lowest rate ever offered
while sales prices remain low. Low rate + low price = affordability.
The
NFIP authority to issue new and renewal policies, as well as increasing
coverage on existing policies is currently set to expire at midnight on May 31, 2012. This
nonsense happened a few times in 2010 and we can only hope that everyone in DC
figures out that this needs to be extended again. If you have a closing with
flood insurance after June 1, be advised that this issue is on the horizon.
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