Interest Rates Jump but “Operation Twist” in Place

Interest rates up for only the 2nd time in 12 weeks

As the local real estate market continues to gain steam it is certainly interesting to watch what is happening to interest rates. While they stay at artificially depressed levels there is no doubt the main cause is the anemic growth in the overall economy which over the long term certainly is not good news for housing. To date the real estate market in south Florida seems to be impervious to the larger economic picture as inventory levels continue to drop and buyers have fewer choices and higher prices staring them right between the eyes.

As of this morning, the average overnight rate for a fixed 30-year mortgage as reported by was at 3.67% up 5 basis points from where we stood one week ago today. The benchmark 15 year fixed rate is at 3.04% up 7 basis points from last weeks level while the benchmark 5/1 adjustable rate mortgage jumped to 2.72% from 2.68%. This was on the heels of 4 straight weeks of falling rates and only the 2nd time in 12 weeks were rates have increased. Where we go from here is anyone’s guess but the FED seems very content keeping rates at crazy low levels.

Most “experts” expect rates to not move too much in either direction at least through the election coming our way in November. No doubt the Fed’s recent decision to keep on buying our government bond plays a huge roll and this program has been dubbed “Operation Twist”. Sometimes I wonder what they are twisting? If we see continued strength in the housing market rates will certainly increase but there are a number of questions as too how lang the rebound party in real estate can continue with marginal growth in GDP and a lingering unemployment problem where there seems to be no easy answers.

Investors are still driving the market here in northern Palm Beach County and no doubt the rate of absorption needs to be watched as newly listed rental properties linger on the market longer than they did a few months back. Not in all segments but certainly in the lower priced investment grade developments we are seeing pressure.

Stay tuned…………………….


Published by

Tom Priester

After spending years among the top individual performers at one of Palm Beach County’s largest and most successful real estate brokerages, Tom Priester knew there was another way to do real estate. A better way. Real estate services focused on the customer. Like the old days when the customer truly was #1. He tired of listening to why he should be going out to have his customers sign one sided buyers’ brokerage agreements. He tired of hearing how he should be selling customers why paying higher commissions, like 7% and 8%, was to their benefit. He tired of hearing how he should sell his clients on why they should be paying hundreds of dollars in additional “transaction fees”. The business had slid way too far from being focused on the customer. His customer. So he decided the time was right to be different… design. To start his own unique boutique real estate firm truly focused on his customers. They will now have access to a process focused on them. Only the best marketing techniques to sell their homes. No cutting corners. Commission structures based on his clients needs not his. Paradise Sharks was born out of Tom’s passion to return this business to the customer. Where it belongs. If you want a real estate experience that benefits you, just give Tom a call at 561 308-0175 or send him an e-mail at You can always pay more and receive less but that just would not make any sense. Would it?

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s