Friday, Los Angeles mortgage rates jumped from 5.875% to 6.25% as
mortgage-backed securities traders joined the world wide sell-off.
Global stock markets plunged Friday and the Asian markets were weak for
Monday. Investors world wide don’t want to be invested in ANYTHING.
When the world panics, we FLOAT mortgage rates. So, roll the projectors! The movie “Float Club” is playing all week.
Interestingly enough, gold isn’t skyrocketing in price. Long held as a “safe haven” during times of turmoil, investors are opting to hold their portfolios in cash instead:
Bullion is down 15 percent this month as the dollar climbed to a two-year high against the euro and the Standard & Poor’s 500 Index headed for its steepest monthly loss since 1938.
`We’re seeing some consolidation in the market today as
investors pause for breath following the roller-coaster we had last
week,” Zhu Lv, research manager at Shanghai Tonglian Futures Co., said from Shanghai today.
Gold for immediate delivery gained as much as 1.7 percent to
$746.91 an ounce, and traded at $735.33 at 10:29 a.m. in Singapore. The
metal fell below $700 on Oct. 24. Silver for immediate delivery was up
1 percent at $9.4575 an ounce.
Gold still benefits from its safe haven properties, although
these days, more and more are choosing to hold just cash instead, so it
won’t be surprising to see gold below $700 again,” said Zhu.
What’s that mean? It means that while investors are cautious, they
aren’t completely terrified and that bodes well for mortgage-backed
securities. When investors buy mortgage-backed securities, Los Angeles mortgage
rates drop; that’s what we think will happen in the next 7-10 days.
I cautioned borrowers to lock in all October closings last week
when mortgage rates dipped below 6%. That opportunity had a
short-lived window. Like all panics, reason eventually prevails.
Central banks world wide are slashing interest rates to avoid an
economic recession. This make US dollar denominated investments,
especially mortgage-backed securities more attractive.
Hold out for a mortgage rate below 6% if you’re closing in November.
Originally posted on Millionaire Real Estate Lender