Mortgage bond prices had another terrible week pushing mortgage interest rates considerably higher. (The interest rates rose by about 1 and 1/2 of a discount point!!!). Oil prices continued to escalate hitting over $70/barrel. The Fed attempts to keep rates in check were not very effective as selling pressure continued. Bernanke tried to calm the markets by reiterating forecasts of tame inflation but his words fell on deaf ears among bond traders. Unemployment was 9.4%, higher than the expected 9.2%.
The low mortgage interest rates that everyone considered a given have quickly gone away.
How does this affect the real estate market? Purchasers have started withdrawing from the market... Most likely, we will see more short sales and foreclosures in the months to come....
As expected, properties at walking distance to metro stations remain very attractive for purchasers.
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