What Are Interest Rates Going To Do? 7/16/07

Dear Friends,

You like me are asked this question often. "What Do You Think Interest Rates Are Going To Do?"

I post the Mortgage Market Update each week. This week I'm going to break down the dialog and show you the magic words behind the script.

What are you currently saying when someone asks you this question?
"Rates are going up"
"Rates are going down"
or my least favorite
"If I knew that I would be a millionaire"

I would like to suggest that you give the following dialogue a try. Experience shows that when someone asks you "How are the rates or What do you think rates are going to do?", they are really asking "How are the rates going to affect me?"

Week of: Monday, July 16, 2007

Presently Market Conditions Are:
The Department of Commerce reported last week that retail sales for June dropped 0.9 percent. The drop was partly incited by weak demand for durable goods and falling gasoline prices. Though gas prices had a negative impact on retail sales for June, they had a positive influence on Consumer Sentiment in July. U.S. Consumer Sentiment rebounded to 92.4 which is the highest level since January. Along with the drop in gasoline prices, this increase was also aided by rising stock prices.

My Expectations Are:
Federal Reserve Bank of Philadelphia President Charles Plosser has predicted that consumer spending will continue at a “reasonable pace,” stimulated by income gains coming from “strong” job growth. How will this impact inflation? Plosser was quoted by Bloomberg as having said, “It depends on how data on the economy and inflation evolve.” He went on to say, “If forecasts come in as expected then inflation will moderate going into ’08. But that’s far from a certainty. So clearly we have to remain vigilant.”

As Your Trusted Advisor For Life My Guidance For You Is:
Long-term mortgage rates were pushed higher last week in-part due to the encouraging employment report and consumer credit growth. Rates are still however, at historical lows. Low rates, abundance of housing supply and creative incentives make this a prime buyers market. Consulting with a trusted professional will ensure every real estate transaction meets your financial needs.

Give the dialogue a try.
You don't need to say it word for word, get out a pen and paper and write your own.
The script engages a person in dialogue.

The key words are:
Presently Market Conditions Are - Tell them what they market is doing now
My Expectations Are - Tell them what you expect the market to do
As Your Trusted Advisor For Life My Guidance For You Is - Give them your advise

You will be surprised how well this answer to a simple, yet complex question is received by your clients.

Jeffrey S. Stanton