Post by Sparky on Feb 28, 2008 15:48:08 GMT -8
calculatedrisk.blogspot.com/2008/02/bankrate-fixed-mortgage-rates-at.html
Bankrate: Fixed Mortgage Rates at Highest Since October
From Bankrate.com: Fixed Mortgage Rates at 4-Month High
Fixed mortgage rates increased for the third week in a row, with the average conforming 30-year fixed mortgage rate now 6.41 percent.
(graphic from Bankrate.com)
Holden Lewis at Bankrate.com writes: Fixed rates up, ARMs decline
ARMs are becoming more compelling each week, and this week is no exception, as the most popular fixed rate went up while adjustable rates went down.
The benchmark 30-year fixed-rate mortgage rose 4 basis points, to 6.41 percent, according to the Bankrate.com national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week's survey had an average total of 0.4 discount and origination points. One year ago, the mortgage index was 6.2 percent; four weeks ago, it was 5.88 percent.
From Chairman Bernanke yesterday: Bernanke says 'we have a problem' controlling long-term mortgage rates
'We have a problem, which is that the spreads between the Treasury rates and lending rates are widening, and our policy is essentially, in some cases just offsetting the widening of the spreads, which are associated with signs of illiquidity,' Bernanke told the House Financial Services Committee.
'So in that particular area, it's been more difficult to lower long-term mortgage rates through Fed action,' he said.
The Bernanke conundrum: In the short term, the more he cuts short rates, the more certain long rates may rise.
This is strange. It looks like lowering the fed rate is not helping long term mortgage rates. I wonder if this is just temporary or will this continue?
When they say it has to do with illiquidity, is this in regards to consumers, the banking industry, or both? It looks like the entire financial industry is so messed up that it is just going to get worse. I hope that the people that are predicting a financial collapse of the entire system are wrong. But it does not look like the measures the fed are doing are helping...in fact, it looks like they may be making it worse in the short term.
What can be done to improve the liquidity of the banking industry?