What’s On the Horizon – Friday Afternoon Thoughts!

Well, the week of rising rates is coming to a close. There is still movement in the market and rates look like they’re going to get worse (increase). The storm seems to be abating a bit and we may see a period of flat rates – maybe just the eye of the hurricane.

I think rates will head up a bit afterwards. The budget deficit combined with the enormous US trade deficit are major concerns in my mind. Also, consumer debt is increasing every day. So, not only is Bush borrowing to stay afloat, so are Mr. and Mrs. Jones. Plus, Asian workers continue to lower production costs and make foreign products cheaper and as long as Wal-Mart stocks them, Americans seem to keep buying.

That means a lot of borrowing is going on. Demand for money is high. When demand is high the price goes up, for the same supply. In this case interest rates will go up.

This is of course just my thought this afternoon after looking over the numbers and analyzing macro-economic trends.

Don’t let this keep you from having a good weekend though. If you’re looking at houses this weekend – I say look and if you find something you like make an offer and try to get some of these rates before they go up in the next few weeks.

Enjoy! Again, e-mail me if you have any questions.

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