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Answers (12)
- Pasadenan
- Contributions:21466
As posted in Stan's report to the congressional committee... it will have little to no impact on the number of housing sales.
Zillow's Chief Economist's Testimony...
Zillow's Chief Economist's Testimony...
- Sharon Lewis, "Sharon Lewis"
- Contributions:3923
I think it means you will see a busier real estate market and more refinancing of home loans too as people gravitate to lower interest rates.
Best of luck to you on the sale of your home in the spring market!
Best of luck to you on the sale of your home in the spring market!
- Pasadenan
- Contributions:21466
"My "guess" it means continued rates in about the 4.0% range for the next 12 months.. but temporarily 30 yr fixed rates in the 3.5% to 3.875% range.
It will be interesting to see how much lower the rates might go in the next few days, and then the "correction" for the over-reaction." -
We saw that "correction" anticipated today, with the quote rates going back up to 4.0% for 30 year fixed.
By the way, the 30 year fixed average quotes really did not go below 3.75% (this time).
Just moving money from 1 and 2 year treasuries to 7 yr, 10 yr, 20 yr and 30 yr treasuries is not going to have any major effect.
It will be interesting to see how much lower the rates might go in the next few days, and then the "correction" for the over-reaction." -
We saw that "correction" anticipated today, with the quote rates going back up to 4.0% for 30 year fixed.
By the way, the 30 year fixed average quotes really did not go below 3.75% (this time).
Just moving money from 1 and 2 year treasuries to 7 yr, 10 yr, 20 yr and 30 yr treasuries is not going to have any major effect.
- Nelson Bayne, "StCasimirsSavingsBan"
- Contributions:39
When doing any financial plan - which I am implying you are looking into the future - you need three partners. Your accountant, an attorney and a lender. As a lender - I would ask "what is your financial exposure for the funds necessary for delivery or investment during the June 2012 plateau. Your Accountant will make a fiscal decision and your attorney will keep you in compliance. Operation Twist - Only you "can twist and shout"
from an article:
http://www.npr.org/blogs/money/2011/09/21/140643696/operation-twist-explained-in-4-easy-steps
Here's what it means.
1. The Fed already owns more than $1 trillion in bonds, purchased over the past few years in an effort to bring down medium- and long-term interest rates.
2. A lot of those bonds — hundreds of billions of dollars worth — are medium-term bonds, which come due in the next few years.
3. Interest rates on medium-term government bonds are already near zero.
4. The Fed may sell some of those medium-term bonds, and use the proceeds to buy longer-term bonds — such as 10-year Treasuries.
Operation Twist should, in theory, drive down the interest rate on 10-year bonds. (When demand for bonds rises, interest rates fall.) Lots of other interest rates — including mortgages — are tied to the 10-year Treasury rate. So this should drive down interest rates across the board.
But it's unclear how much effect the effort will have at this point.
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I have a rule: Do not look in the past to form a philosophy of the future. Plan your business and fiscal needs based on your business and opportunites. Good luck!
- Pasadenan
- Contributions:21466
Well, if the Fed is not pumping in "new money" to buy the 10 year treasuries, then they must be taking money out of the banking system to dump into federal government debt?
Although I can understand how they think that will reduce people pulling their investments out of the bond market due to fears of devaluation of their dollar... I don't see how this is supposed to have any influence on the employment rates.
Suggestions for congress to do something? Congress has known for decades what Congress did to get U.S. companies to ship jobs overseas... namely insist on minimum wages, breaks and other workers "protections" here including environmental regulations, and employment taxes, and to not tax exported labor with that having no minimum wages at all!
The simple solution? Tax environmental impacts on all products sold here, regardless of where they are produced, and tax all exported labor, especially if they are U.S. Companies. The government fear? That the Global U.S. companies will abandon the U.S. and relocate to foreign countries that are more friendly to their environmental and worker abuses. The solution? Stop unnecessary government spending programs so that the tax burden doesn't need to be so high.
Once you correct for the discrepancy of labor burden for foreign labor as compared to domestic labor, the jobs will come back, but not until then.
The other potential solution? The "opposite" of what the public and congress thinks.... open the borders, thus increasing product and service demand, thus increasing the need for quality local labor.
Although I can understand how they think that will reduce people pulling their investments out of the bond market due to fears of devaluation of their dollar... I don't see how this is supposed to have any influence on the employment rates.
Suggestions for congress to do something? Congress has known for decades what Congress did to get U.S. companies to ship jobs overseas... namely insist on minimum wages, breaks and other workers "protections" here including environmental regulations, and employment taxes, and to not tax exported labor with that having no minimum wages at all!
The simple solution? Tax environmental impacts on all products sold here, regardless of where they are produced, and tax all exported labor, especially if they are U.S. Companies. The government fear? That the Global U.S. companies will abandon the U.S. and relocate to foreign countries that are more friendly to their environmental and worker abuses. The solution? Stop unnecessary government spending programs so that the tax burden doesn't need to be so high.
Once you correct for the discrepancy of labor burden for foreign labor as compared to domestic labor, the jobs will come back, but not until then.
The other potential solution? The "opposite" of what the public and congress thinks.... open the borders, thus increasing product and service demand, thus increasing the need for quality local labor.
- Wayne Brown, "SDMortgagefinder"
- Contributions:1433
They keep talking about this lowering rates....hard to believe, but let's face it. We've seen alot of strange stuff the last three years.
I think down for at least the foreseeable future.
Time will tell.
W
I think down for at least the foreseeable future.
Time will tell.
W
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Dan,
This "Twist" does not involve printing more money. http://finance.fortune.cnn.com/2011/09/21/federal-reserve-operation-twist/
Happy funding, Rudi
This "Twist" does not involve printing more money. http://finance.fortune.cnn.com/2011/09/21/federal-reserve-operation-twist/
Happy funding, Rudi
- Clay Branch, "Georgia Loans"
- Contributions:7838
My guess is it will have no affect on mortgage pricing next June. It remains to be seen if this has the same impact once the buying starts as it has had today. The most recent example of this strategy AKA QE2, resulted in rates going up, not down.
- Dan, "the_country_hick"
- Contributions:4699
No one knows. I can give a theory.
If interest rates remain low and no one spends any money things are fine and rates will continue to remain reasonably low.
If interest rates remain low and the extra money the fed has printed is spent inflation will take off 70's style. When (if) that happens interest rates being hiked are the only solution to cure the inflation disease. That would cause mortgage rates to skyrocket.
In short if inflation does take off things will look bad, but inflation should only skyrocket if the economy recovers.
Printing more money makes it less scarce and less valuable. Uncle Ben does not understand this fact.
If interest rates remain low and no one spends any money things are fine and rates will continue to remain reasonably low.
If interest rates remain low and the extra money the fed has printed is spent inflation will take off 70's style. When (if) that happens interest rates being hiked are the only solution to cure the inflation disease. That would cause mortgage rates to skyrocket.
In short if inflation does take off things will look bad, but inflation should only skyrocket if the economy recovers.
Printing more money makes it less scarce and less valuable. Uncle Ben does not understand this fact.
- Mom2NAC
- Contributions:57
I wish I could get off the fence today! Unfortunately we haven't even put our house on the market yet. We were looking to sell/buy spring 2012.
- Pasadenan
- Contributions:21466
My "guess" it means continued rates in about the 4.0% range for the next 12 months.. but temporarily 30 yr fixed rates in the 3.5% to 3.875% range.
It will be interesting to see how much lower the rates might go in the next few days, and then the "correction" for the over-reaction.
It will be interesting to see how much lower the rates might go in the next few days, and then the "correction" for the over-reaction.
- Clay Branch, "Georgia Loans"
- Contributions:7838
I don't think anyone knows just yet but for today it means get off the fence.
"Operation Twist" - What does it mean for mortgage rates through June 2012?
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