When you really think about it – the world is a small place! What happened in Japan & what happens in the Middle East effects Raleigh mortgage rates & Cary home loan rates.
When thing are uncertain or unclear, investor try to find a safe harbor & there is nothing safer than a bond, specifically a mortgage bond. Now remember Raleigh mortgage rates come from those mortgage bonds. The flight to safety is what happened last week – when this flight to safety occurs bond prices improves & when that happens Home loan rates in Raleigh & Cary improve – Folks, this is what happened last week!
Now this flight to safety is generally a very short flight – when events around the world, (which is like an event around the corner – because it is a very small world) become certain & clear…may I even use the “stable” – this safe harbor trade will unwind & unwind very fast causing bond prices & Raleigh mortgage rates to unwind & get worse very quickly.
Then pepper in the fact that the nemesis to a bond is inflation – last week we saw 2 HOT reports (i.e. consumer price index & the producer price index) indicating that inflation technically may already be here as both report beat the streets expectations.
The punchline: when if the situations in Japan and the Middle East stabilize or improve, we could see further unwinding of the “safe-harbor” buying of bonds… which WILL hinder improvement in Raleigh home loan rates.
If you have been thinking about purchasing a home, call or email me to learn more about how you can benefit. Or forward this newsletter on to someone you know who may benefit from today’s historically low rates.
KEVIN MARTINI
919.858.0023
also check out my video blog @ www.MartiniFactor.com
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