So since Greenspan raised prime.. mortgages should go down??

Correct??

Re: So since Greenspan raised prime.. mortgages should go down??

I think interest rates go up and home prices go down once the prime rate increases. But if this is the case, I would rather have a lower interest rate.

Re: So since Greenspan raised prime.. mortgages should go down??

Re: So since Greenspan raised prime.. mortgages should go down??

Usually if Prime goes up... interest rates go up.

But in the past year or two... they have raised prime every time they met. And the long-term interest rates have stayed low.

Thats why the short-term rates (like 5/1 ARMS) don't offer a major $$$ break over long term rates (like 30yr fixed). Cause when you raise prime... all the mortgages based upon prime like the ARMS go up.

Re: So since Greenspan raised prime.. mortgages should go down??

As you can see from this pic... the fed has raised rates almost every time they met since '04. However long-term mortgage rates have stayed well below 6% for most of this period.

But people wonder how high the prime rate would have to go that will cause the long term mortgage rates to shoot up.

Image Attachment(s):

Message edited 9/20/2005 4:25:12 PM.

Re: So since Greenspan raised prime.. mortgages should go down??

Thanks DJ. I didn't lock yet because I'm waiting and seeing since my mortgage broker recommended it and explained to me what you explained.
I'm *praying* that in at the very least a 30yr fixed goes down or takes a small jump.
I'm pretty much locking tomorrow no matter what.

I hate the game!

Re: So since Greenspan raised prime.. mortgages should go down??

I locked in early last week because I really didn't see the rates going down any more than they did.

The hurricane (as bad as it sounds) was the best thing that could have happened to the interest rates. They dipped slightly... but then stayed level for all of two weeks ago. I decided to lock cause as people start putting this hurricane behind them... normalicy will bring higher rates.

I locked in at 5.375% with about a half point of lender fees.

Re: So since Greenspan raised prime.. mortgages should go down??

DJPill,

I just had to chime in... I have mentioned in previous posts that I teach College Eco. Good job, nice graph... I'll call you if I need a sub

Re: So since Greenspan raised prime.. mortgages should go down??

Well I can't take credit for creating the graph (pull it from a news site).

But it does explain my point I was trying to make.