Mortgage Rates Hit Two-Year High, Probability of a Hike: 97%

Rate hike is a done deal. The real question is what will they say about how many rate hikes for next year? Last December, they said 4 hikes this year. We will ended up with 1. If they forecast too many hikes, that could throw cold water on this rally in the short-term.

I think the Fed guided 4 hikes to get the inflation expectation up. They didn’t really expect to do 4 to begin with. Now that inflation expectation is thru the roof they may tamper it down a bit. We want the mythical Goldilocks environment: not too hot and not too cold…

Next week, FED is likely to increase another 0.25%. Looks like possibility is high that may result higher mortgage rates and some slag in real estate.

Like Trump, elt1 is amazing me telling 2017 is likely recession or correction. Good to wait for some more time, if his words are coming through.

If FED hikes the rate, possibility of correction is there as banks or lenders can not maintain low mortgage rates forever like what we had !

I am not sure what will happen…We will know in February. .but if they relax lending requirements the higher rate drag will be offset by higher demand from millions of more eligible borrowers

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The 0.25% increase is already reflected in bond and mortgage rates. Right now, there’s a low chance of a March increase. If they change so a March increase is near certain, then mortgage rates will go up. If not, then mortgage rates will remain flat.

What kind of correction are you expecting in Cupertino/WSunnyvale/WSJ/MV, Campbell/SJ/SC?

Hardly you will see correction here, may be around 5%-8%. Listing agents will to properly list homes. However, competitions get reduced, people will be able to get those at list price. Fixers will really be deals if correction comes.

It all depends on how many times FED increases rate and how (long after) they raise subsequent rates. DOW (19614.8 !) is nearing almost historic 20000 !