Newspapers each day or week have to write something about the real estate outlook and mortgage rates. We are obsessed with the daily movements of both. Zillow just penned this update, “Zillow Mortgages’ current mortgage rates in Maryland for mortgages decreased 1 basis point from 4.03% to 4.02%. … Maryland mortgage rates today are 1 basis point lower than the national average rate of 4.03%.
“The Maryland mortgage interest rate on October 2, 2014 is down 10 basis points from last week’s average Maryland rate of 4.12%.”
Kent Hoover at the Baltimore Business Journal wrote, “Pending home sales dropped in August for the same reason closings did— investors retreated from the housing market.”
The National Association of Realtors’ Pending Home Sales Index, which is based on contract signings, fell 1 percent last month to 104.7. That number still represents an above-average level of contract activity.
Right now everything is going well for the U.S. Oil has backed off from $100+ per barrel prices. Some analysts recently argued that $3.00 gasoline is in our near future. The dollar is strong versus most currencies. Interest rates are pushing lows in 10-year and 30-year treasuries not seen since this time last year. Inflation judging by the price of gold isn’t a public concern.
What is an ongoing concern is the level of employment. Six percent is not high, but it masks the 92 million that are not working; either they can’t find a job or have given up trying. In addition 45 million on food stamps indicates an economy that is just drifting along. Also, median income has been steadily declining for the middle class for the last decade.
One could argue that soon the Federal Reserve will raise interest rates to take away the party, punch bowl before every one is dancing on the table. With the economy as fragile as it is, it seems any tightening would be short lived. One could also argue that soon politicians will take their foot off the neck of entrepreneurs and allow the economy to flourish, but that seems a pipedream, too. Seems we flounder along and you can rest easy that interest rates will continue to fluctuate sideways.