What Are Interest Rates Going To Do? 7/30/07

Dear Friends,

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

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"

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?"

I would like to suggest that you give the following dialogue a try.


Week of: Monday, July 30, 2007

Present Market Conditions
The Commerce Department reported last week that the U.S. economy grew at an annualized rate of 3.4 percent during the second quarter which was the fastest pace since the first quarter of 2006. This was a sharp turn around from the bleak 0.6 percent growth rate seen during the first quarter of this year. This would put the yearly average at 2.0 percent. Also in economic news, Consumer Sentiment improved in July with gasoline prices dropping and stock markets hitting marginal highs.

Expectations
Though stock markets hit highs during the month of July, last week was quite tumultuous. Economists are optimistic that the total of economic news, including the robust labor market in July, will calm some of the market jitters. According to Dana Johnson, chief economist at Comerica Bank Inc. in Detroit, “I think we’re going to do a little better in the second half – growth averaging around 2.5 percent but I think the acceleration is going to be gradual rather than obvious or vigorous.”

Guidance
Recent economic reports have been a mixed bag of good and insipid news. It all has impacted real estate and mortgage sales. Rates declined further last week and there is still an ample supply of homes for sale. There are tremendous opportunities for buyers in this market. To take advantage of these tremendous opportunities consult with a highly trusted professional.