Tag Archive for: inflation

Fed Speaks – Rates Up; Paying Off Student Loans With Mortgage; Interest-Only Loans

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Fed Chair Powell spoke yesterday and sent the bond market into a tizzy, as investors sold off their bonds and pushed rates sharply higher. What crazy thing did Powell have […]Read More

Inflation Way Up & Rates Down? What Does The Bond Market Know?

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I blog about inflation over and over b/c its potential to send interest rates into the stratosphere and to disrupt our entire economy is so strong. The last time we […]Read More

4 Must-Know Facts About INFLATION, Housing, And Mortgages

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With inflation here and only expected to get worse, many potential buyers are getting nervous and wondering what to do. As a result, I thought I’d address a few major considerations today.Read More

Inflation Is Here! Why Didn’t Rates Climb More?

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The world is “awash in cash” right now with investors desperately searching for places to park that cash in order to preserve its value and/or generate returns in any way they can. Given that many other countries are more precarious than the U.S. with respect to fiscal and monetary policy and given that there are just not enough other investment vehicles to absorb all that cash, the demand for U.S. debt (mortgages and treasuries) remains surprisingly strong (which keeps rates lower too).Read More

There Is A Huge Glut of Wood, So Why’s Lumber So Expensive?

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There are three reasons why: (1) Many sawmills shut down after the 2008 housing crisis because demand fell to zero; (2) many shut down last spring because of COVID and have yet to fully revive; and (3) the cost to build new mills is prohibitively expensive in this day and age because of their complexity; sawmills are all about technology and software now. So, they need a lot more highly trained and really smart “Scrawnies” as opposed to “Brawnies.”Read More

Cage Match Of The Century: Inflation vs. Deflation; Diversify!

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After the 2008 mortgage meltdown, the Fed and congress stepped in with trillions of dollars of “Quantitative Easing” (buying of Treasuries and Mortgage-Backed Securities) and stimulus spending – and numerous market watchers and pundits, e.g. Arthur Laffer, predicted massive inflation. They were all wrong for several reasons, including the fact that we were already in a deflationary environment, and, more importantly, banks largely stopped lending and consumers did not spend like they did in the past – so the newly created money did not turn over or end up in the economy. This Investopedia article explains this in more detail.Read More

Why A Giant Stuck Ship (Suez Canal) Impacts Mortgages & Real Estate

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YouTube gets me – and thank goodness for that because it sends me entertaining videos all day long, every day! This is why I know that Komodo dragons eat deer […]Read More

Why Inflation Makes Your Fixed-Rate Mortgage An Asset

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Not only is housing a great inflation hedge as a “hard asset,” but a low 30-year fixed-rate makes financed housing an even better inflation hedge. A fixed mortgage payment in a world of rising inflation, rising incomes, rising rents, and a falling dollar could be the best asset we have.Read More

2021 Predictions: Rates, Inflation, Housing & Affordability

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The median price increased far faster last year than the average price, partially because builders are building bigger and bigger homes (because they are more profitable) and because many buyers were looking for larger homes in general because they are more suitable for post-COVID living.Read More

Will Mortgage Rates Fall Again? What Are The Variables?

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I received numerous questions in regard to mortgage rates yesterday, e.g. Will they come down again? Should I lock now or wait? What do I think will happen? As always, […]Read More

Why 13% Interest Rates In 1980 Were Effectively LOWER Than Today’s; Real Rates vs. Nominal Rates

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Mortgage interest rates were just under 19% in the early 1980s, as shown in this table by Freddie Mac, going back to 1971. BUT, “real rates” were sometimes LOWER than […]Read More

What Will Happen To Mortgage Rates in 2021

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Here is my bold prediction for mortgage rates in 2021: They will go up and down. You can take that to the bank! OK – here’s a more specific prediction […]Read More

Fed: “We’ll Ignore Inflation & Keep Rates Low Forever!” Or Not

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Media outlets are abuzz with news about The Fed’s new commitment to keep rates low pretty much forever and to also change its inflation targets. This WSJ article is just […]Read More

Why COVID-19 Is Not Hitting Housing Prices

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A few weeks ago, I blogged about why we are not seeing more foreclosures despite our severe recession and a huge number of delinquent borrowers. The reasons include: (1) borrowers […]Read More