Colorado Online Mortage rates are on the rise: Inflation to blame?
Colorado Online Mortgage rates take another hard hit today. We are at our highest 30 year fixed Colorado Online Mortgage rate for 2008. Historically speaking Colorado Online Mortgage rates are still good, but certainly not as good as they were 3 months ago. So why are we facing all of these price increases to our Colorado Online Mortgage rates? The answer is simple: Inflation. The fear of inflation is the biggest cause for movement in the Colorado Online Mortgage markets. Investors holding on to long term bonds see the value of those bonds decrease as the value of on money decreases. Colorado Online Mortgage rates are tied to a fixed rate income stream and anything impacting that income stream will cause Mortgage Backed Securities to drop in value. Colorado Online Mortgage rates react inversely to the price of bonds, which is why Colorado Online Mortgage rates have gone up.
Now what information do we have to show that inflation is on the rise? Consumer Price Index and Producer Price Index are both leading economic reports showing inflationary pressure. Both reports have major impacts on Colorado Online Mortgage rates, but interestingly enough, both reports came in better then expected for the month of May. So why does inflation appear to be a problem? More importantly why is it impacting Colorado Online Mortgage rates? Well another big mover of Colorado Online Mortgage rates come from information released by the Federal Reserve. When the Federal Reserve speaks investors listen very closely. So closely in fact that they tend to read into things that may or may not have been the intent of those releasing the information. Colorado Online Mortgage rates tend to jump up when Federal Reserve members begin to talk about inflation.
Richard Fisher the Federal Reserve board member representing the Southern States spoke to the media earlier today. Mr. Fisher expressed great concern about inflation stating that Americans should be wary of “stirring the embers of inflation.” Colorado Online Mortgage rates jumped quickly on fears that inflationary numbers will appear higher in the months to come. Another major fact on inflation comes in oil prices. This is something we can see now and it is right in front of us. The cost of shipping increases when oil prices are high. When Shipping costs go up so do prices, which is what inflation is. It’s hard to know exactly what will happen in the months to come as it relates to Colorado Online Mortgage rates. It appears that there is a struggle between bad economic data, which is good for Colorado Online Mortgage rates and inflationary concerns which is bad for Colorado Online Mortgage rates. Depending on what investors are motivated by, will dictate what direction Colorado Online Mortgage rates will go.
Colorado Online Mortgage rates were also impacted by new home sales which was the only official economic report released today. The numbers came in far better then expected which created even more momentum as it relates to the increases seen in Colorado Online Mortgage rates today. Finally we are seeing signs of an economic Term not used since the Reagan administration: “Stagflation” A real problem and an obvious answer to what is going on today. You can read more about this at www.coloradohomemortgageloan.net/news. You may find that to be an interesting read.
The final analysis for the day will be whether to Lock or Float. It’s hard to recommend Floating when Colorado Online Mortgage rates continue to rise. It’s even harder when there are no obvious signs that Colorado Online Mortgage rates will stop rising. However if you are looking at the long term picture FLOATING makes sense. If you are closing in 15 days or greater then FLOATING may pay off. Most investors have hedged a considerable amount in the pricing for a 30 year fixed Colorado Online Mortgage rate. They may be a bit too cautious and in return Colorado Online Mortgage rates are worse then they should be. Colorado Online Mortgage rates have room to drop but we may not see any drops soon. Especially, if Bernanke speech tonight reaffirms Fishers concerns on inflation. Fisher is known to fear inflation and to have that as his primary focus, but if the big man on the board begins to sing the same tune, we will see Colorado Online Mortgage rates go up even further. If you can LOCK a 30 year Colorado Online Mortgage rate for 6.0% then go ahead and LOCK. I am moving my new LOCK recommendation to 6.0% and will push my clients to LOCK in at that Colorado Online Mortgage rate. I expect that we will gain some of the lost ground for Colorado Online Mortgage rates over then next few weeks, but for now Inflation continues to be the hot topic which is bad for Colorado Online Mortgage rates.
If you have questions or need any help with your Colorado Online Mortgage please give me a call directly.
Daniel
Tags: Colorado Online Mortgage, inflation, Mortgage Rates, Online Mortgage
