Monday Morning Cup of Coffee: Is housing strong enough to weather rate hikes?

Monday Morning Cup of Coffee: Is housing strong enough to weather rate hikes?

Plus the mortgage bond outlook, the NYT joins the GSE investor struggle, and more

Sources: Morris Schneider Wittstadt declaring bankruptcy, closing immediately

LandCastle Title’s operations will not be affected

8 avoidable mistakes first-time homebuyers keep making

Stop doing these things
W S
Investments / The Ticker

Fed shakes up the bond market

stock art
/ Print / Reprints /
| Share More
/ Text Size+

Federal Reserve Chairman Ben Bernanke stirred the bond market after announcing the Fed’s plans to continue Treasury and MBS purchases at the current pace, Bloomberg reported.

Yields, which rose 0.02 percentage point as of 11 a.m. in New York, soared as high as 3.81 percent on Sept. 5 from 2.28 percent in May as speculation mounted that the central bank would pare its $85 billion of monthly bond buying including $40 billion of government-backed mortgage securities.

“It is essential for the Fed to convince the market of its commitment to keep rates low” because many holders of mortgage bonds use borrowed money in their investing, BNP Paribas SA analysts Anish Lohokare and Timi Ajibola wrote yesterday in a report. Higher financing rates for buyers require steeper yields to maintain returns.

Source: Bloomberg
Read full story

Recent Articles by HousingWire Staff

Comments powered by Disqus