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Mortgage rates will trend lower during rest of the year
Peter Oberois
May 21, 2007
November through December will be an ideal time for mortgage refinance. The econometric models point to rate cycle to in May and a bottom in December.
The bond market took a bad beating for no real fundamental news in the last several weeks. The short-term rates suffered too. But when you count all the economic news including residential real estate, you find weakness across the board. The only bullish news on the economy was from a slight improvement in consumer confidence triggered by stock market rise and Fed statements on the economy.
The top in yields will happen this week and the bond market will start rallying soon. The ten-year note will yield close to 4% in December even if Fed does not lower rates.
Quantitative and probability models predict a stock market crash between now and end of the year. If that happens, Fed will lower rates fast by 1.5% before the end of the year. In that case the ten-year note will yield slightly above 3%.
The mortgage rates can collapse and a rally in real estate market will start as a cyclical bull move within a very large secular bear market in stocks, gold and real estate.
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