Zeev's Turnips Patch-No Politics (ZEEV)

[LG]

augieboo: Mortgage rates are supposedly tied to the 10Yr Treasury yield, however as of late rates have diverged and declined more rapidly than the 10 Yr Note rates. My understanding (per my contacts in the real estate industry) is that there is to much money chasing to few loan applications.

My armchair analysis is that some of the money that has been coming out of the stock market is going into investment instruments that at least in part are seeking real estate loans while at the same time loan demand has begun to diminish due to in part by stock market wealth effect operating in reverse and of course the many high paying jobs being lost in the telecom, internet, high tech and other sectors that have been taking a hit.

The next likely outcome will be for housing prices to pullback a more noticeable overall decline on more than isolated regional areas basis such as has been the case today in some of the previously rapid appreciation areas such as San Francisco and Silicon Valley.