Comments on: The Fed Dropped Rates, Why Aren’t Mortgage Rates Dropping? http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700 Phoenix Real Estate -- Anything and everything about it. Plus random musings... Now with MLS Listings Search -- And No Registration! Sun, 20 Jul 2008 10:49:22 +0000 http://wordpress.org/?v=2.5.1 By: Steven http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-27426 Steven Mon, 03 Mar 2008 07:56:48 +0000 http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-27426 Jay, Interesting article. I'm a bit surprised though by your comment, "the fed funds rate and mortgage rates aren’t “correlated”. Doesn't the fact that the coefficient of correlation is relativley very high - 0.79 - indicate that in fact there is a correlation? I would agree with you that mortgage rates are not tied to the Fed Funds or Discount Rates, but to say that they're not correlated seems to be missing the point. That's because if you told me the Fed dropped rates, wouldn't I be right about 4 out of 5 times to say that mortgage rates would also drop (vs. go up)? Keep blogging! Steven Jay,

Interesting article. I’m a bit surprised though by your comment, “the fed funds rate and mortgage rates aren’t “correlated”. Doesn’t the fact that the coefficient of correlation is relativley very high - 0.79 - indicate that in fact there is a correlation? I would agree with you that mortgage rates are not tied to the Fed Funds or Discount Rates, but to say that they’re not correlated seems to be missing the point. That’s because if you told me the Fed dropped rates, wouldn’t I be right about 4 out of 5 times to say that mortgage rates would also drop (vs. go up)?

Keep blogging!
Steven

]]> By: Michael Oliver http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25351 Michael Oliver Sun, 27 Jan 2008 06:09:58 +0000 http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25351 We need the FED to just keep on dropping our AZ market is in the toilet at least now with one of the fastest growing populations in America we will tun much soner than later and then back to nice growth rates. We need the FED to just keep on dropping our AZ market is in the toilet at least now with one of the fastest growing populations in America we will tun much soner than later and then back to nice growth rates.

]]> By: Late Night Austin Real Estate Blog http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25340 Late Night Austin Real Estate Blog Sat, 26 Jan 2008 11:11:37 +0000 http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25340 Looking at the chart it looks like regardless of the fed rate, interest rates dont fall much below 5%. Is this generally true? Is their pretty much no chance of ever having a 4% interest rate on a 30 year loan. Looking at the chart it looks like regardless of the fed rate, interest rates dont fall much below 5%. Is this generally true? Is their pretty much no chance of ever having a 4% interest rate on a 30 year loan.

]]> By: Jay - The Phoenix Real Estate Guy http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25336 Jay - The Phoenix Real Estate Guy Sat, 26 Jan 2008 06:14:46 +0000 http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25336 Bobby Joe - isn't a MBS a bond? Maybe not, like I said, I'm not a lender or economist. Perhaps I chose the wrong word. Regardless, the main point of the article was that the Fed Funds rate and Mortgage rates are not well correlated. Do you agree (or not) with that? And whether mortgage rates are influenced by MBS's or the bond market, the fact is they are not controlled by the Fed. Bobby Joe - isn’t a MBS a bond? Maybe not, like I said, I’m not a lender or economist. Perhaps I chose the wrong word. Regardless, the main point of the article was that the Fed Funds rate and Mortgage rates are not well correlated. Do you agree (or not) with that?

And whether mortgage rates are influenced by MBS’s or the bond market, the fact is they are not controlled by the Fed.

]]> By: Bobby joe http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25334 Bobby joe Sat, 26 Jan 2008 03:04:01 +0000 http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25334 The Mortgage rates are NOT created from MBS yield ... Follow the bond market and you'll find your Mortgage rates. You need to read more about the money/credit/debt cycle. You'll find the reason why so many people are calling for more pain. The Mortgage rates are NOT created from MBS yield … Follow the bond market and you’ll find your Mortgage rates.

You need to read more about the money/credit/debt cycle. You’ll find the reason why so many people are calling for more pain.

]]> By: Doug Willis http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25332 Doug Willis Sat, 26 Jan 2008 01:07:43 +0000 http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25332 Jay, Great explanation and analysis. The great thing about blogging is that it exposes you to so many different topics and opens new areas of learning. Should be required reading in RE 101. Jay,
Great explanation and analysis. The great thing about blogging is that it exposes you to so many different topics and opens new areas of learning. Should be required reading in RE 101.

]]> By: Santa Barbara Real Estate Voice http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25330 Santa Barbara Real Estate Voice Sat, 26 Jan 2008 00:38:16 +0000 http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25330 Jay, Thanks for the posts and the links. I was about to write a similar post and really did not know where to go. I just spent a few hours talking with some lenders about the rates, the fed cut and what this means. Basically clearer answers could of been given 2 years ago. Now even the lenders are uncertain...rules are changing daily on what they can and can't do as far as rates. One thing that was expressed is that this does bode well for clients in good financial standing, good credit scores etc. They can take advantage of this. For first time home buyers, lower credit scores and/or people with little to no down, this fed cut means nothing apparently. Take care Jay,

Thanks for the posts and the links. I was about to write a similar post and really did not know where to go. I just spent a few hours talking with some lenders about the rates, the fed cut and what this means.

Basically clearer answers could of been given 2 years ago. Now even the lenders are uncertain…rules are changing daily on what they can and can’t do as far as rates. One thing that was expressed is that this does bode well for clients in good financial standing, good credit scores etc. They can take advantage of this. For first time home buyers, lower credit scores and/or people with little to no down, this fed cut means nothing apparently.

Take care

]]> By: Shailesh http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25328 Shailesh Fri, 25 Jan 2008 21:41:37 +0000 http://www.phoenixrealestateguy.com/the-fed-dropped-rates-why-arent-mortgage-rates-dropping-2/700#comment-25328 Jay, Brilliant analysis. It's amazing how mortgage rates rose "astronomically" on Wednesday (the day after the 0.75% Fed cut). Mortgage rates rose further on Thursday. Today (Friday) its been stablizing and tending downwards. So, the past week has provided a very good example of the point you're making. Jay,

Brilliant analysis. It’s amazing how mortgage rates rose “astronomically” on Wednesday (the day after the 0.75% Fed cut). Mortgage rates rose further on Thursday. Today (Friday) its been stablizing and tending downwards.

So, the past week has provided a very good example of the point you’re making.

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