Jason Bernabei, TriCastle Realty
DEL MAR, May 21 2012 -- Goooooooood
Monday morning San Diego!! Another week of absolutely fabulous weather, and
another week of absolutely, fabulously low mortgage rates. But why? Why do
rates ebb and flow, rise and fall again from day to day, week to week, month to
month? Reasons too many to tell in a small column such as this, but as I’ve
highlighted in past Monday columns, economic and political realities across the
pond are playing a big part.
DEL MAR, May 21 2012 -- Goooooooood
Monday morning San Diego!! Another week of absolutely fabulous weather, and
another week of absolutely, fabulously low mortgage rates. But why? Why do
rates ebb and flow, rise and fall again from day to day, week to week, month to
month? Reasons too many to tell in a small column such as this, but as I’ve
highlighted in past Monday columns, economic and political realities across the
pond are playing a big part.
Yes, for the third time in
as many years, an ever-worsening Eurozone is pushing May mortgage rates to new
lows here stateside. The story unfolds in Greece and begins in 2010. Two years
back, it was uncovered that successive Grecian governments had deliberately misreported
the nation-state's economic statistics in part to meet European Union
standards. The fraudulent data had, simply put, facilitated Greece’s ability to
spend beyond their means while hiding deficits from EU auditors. Upon realizing that Greece
was heavily in debt with little means to repay its creditors, a massive bailout
from the IMF and the rest of the Eurozone nations ensued. The terms for Greece
said that, in order to receive its €110 billion aid package, Greece would be
required to enact strict spending controls. The deal was met with outrage by
the Greek public. Massive demonstrations, the whole ball of wax. There's been
general social unrest ever since and, on May 6th of this year, Greece held a
special "early election" to elect all 300 members to its legislature.
With no party winning majority in the elections, the debacle continues to
unfold. With seven different political groups winning seats in the parliament
last week, a chorus of concerns arose, chief among them that Greece will end
its bid for fiscal restraint, and that Greece may choose to leave the Eurozone,
currently comprised of 17 different nations in the region.
All of this uncertainty over
there makes for a burgeoning business confidence over here. The U.S. mortgage-backed bond market has
been a beneficiary. With the implied backing of the U.S. government,
mortgage-backed bonds are viewed as almost free of risk. The rise in demand for
U.S. mortgage-backed bonds drives bond prices up and bond yields down,
resulting in lower mortgage rates for new home buyers and for existing
homeowners looking to refinance. So get yourself some good Greek food to go with your new rate while the gettin' is still good. And right now, it's reaaaaalllly good. Until next time San Diego, you can contact me, Jason Bernabei, at jasonb@tricastle.com, and check me out each and every Monday on www.threaltyinsiders.com for more, and be sure to tune in to see myself, and other local industry professionals talking real estate on "The Realty Insiders," the ONLY real estate show in town!
Jay’s outlook: sunny
Jason Bernabei, TriCastle Realty
