Interest Rates Drop for 6th Straight Week. Good News or Bad News?

Certainly depends on your perspective

For those out looking for a home who can lock in at the lowest interest rates we have seen for 13 weeks – good news. For businesses who are seeing growth and are capable of borrowing funds for expansion – good news. For those who for some reason have not already refinanced “old” loans to these historically low rates – good news. For investors who put their money in bonds during January – good news.

But for those interested in a strong economy and strong job creation certainly bad news.

Interest Rates

Last week interest rates dropped once again. As of this morning, the average overnight rate on a conforming 30 year fixed loan as reported by Bankrate is down again for the 6th straight week. The drop was small, only 2 basis points to 4.29%. But it came in the same week that the Fed entered the second month of trimming their debt purchases by 10 billion dollars. But if the overall economy keeps sputtering the announced path of debt purchase reductions may change once again.

Interest rates are closely tied to the bellwether 10 year treasury notes whose yield on January 1st had jumped to 3.03% and now stands at 2.66%. Jobs once again, or lack of them, provided the bad news to continue the decline in bond yields and interest rates. During January job creation came in at 113,000 new jobs, far below the 185,000 that had been expected. Jobs for the federal government were cut by 12,000 during January while state and local governments dumped another 17,000 employees.

You may not know it but we here in America have a Chief US Economist of High Frequency Economics and he feels the lack of jobs is not critical and the long term national outlook remains positive with the “housing recovery picking up steam”. I am not kidding this was his quote not mine. Always interesting, always fun.

Fins up……….

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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…..by 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 tom@paradisesharks.com. You can always pay more and receive less but that just would not make any sense. Would it?

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