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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: J. P. who wrote (11510)7/8/2003 2:53:23 PM
From: Jim McMannisRead Replies (1) of 306849
 
Case in point. We had one buyer lock in a few weeks ago at 4.76% on a 30 year. Was he lucky. Called the same mortgage Broker yesterday and all he could offer was 5.62%.
So my example was real world.

I suspect there is a major j curve in mortgage rates. If people get wind of rising rates there will be a frenzy to get in before it's too late. The Lenders on the other hand will simply offer yet higher rates because they CAN. So the door slams shut.

As for allocation,
The stock market typically benefits from low rates but this has been an exception. Working off the bubble, the money funneling into real estate etc.. This time though, the Stock Market will likely enjoy a back up in rates as an indication that the rest of the economy is starting to pick up. So bond holders will begin to cash in and allocate more to stocks. Real Estate will not benefit except for a little j curve action. After that, hold on to your hats.
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