My Mortgage Blog

I got a call from my credit union two days ago. They wanted me to know that they’re writing car loans at (if I remember correctly) 3.24%. It was pretty much a robo-call, which qualifies in my mind as a cold call, which feels like a mildly desperate way of trying to get some business on the books.

Pleeeze! We’ve got 3.24% loans for sale!

Now, I don’t mean to dis my credit union here. I know these people and know they were trying to get this good news out to their customers. It wasn’t just self-serving. And it was probably a reasonably good idea, though the robo-caller just left me a message saying I should call back ASAP. (I, of course, thought I’d bounced a check or something, so the PR value of the call wasn’t so hot.)

But my point, ultimately, is that we are poised at the moment between a good thing and a bad. The good thing is very low rates—lower, in fact, than anyone would have predicted. The bad? Well, why are rates so low?

The lack of confidence in this economy is enormous—though the world has done a good job thus far of avoiding outright panic. This is rather amazing, considering what is at stake…like the world’s banking system. And I don’t want to whine and act like a scaredy-cat, but hey, things are genuinely dicey.

Still, we have a strengthening real estate market, to a degree, and other sectors of the economy aren’t falling off a cliff. Indeed, one can fairly easily imagine that, if we didn’t have these pesky debt problems threatening to bring the euro down (etc.), the world economy—or at least the U.S. economy—would be moving with gratifying strength toward a truly sustainable recovery. But alas, we do have the pesky debt problems. And we have very little accord among economists and political leaders regarding what should be done about them.

That said, however, the forces that would give us a lasting recovery are still at work. The Mortgage Banking Association, which provides a weekly measure of how many purchase money loans and refis are being applied for, gave us some breath-taking numbers today. Okay, they’re high in part because last week was holiday-shortened, but still….

The number of purchase money loans being applied for shot up by 13%. Refis were up by 19%, driven higher, for the most part, by declining interest rates. These are pieces of good news, worthy of our close attention.

At the same time, the 10-year Treasury note yield has been pushed a little higher very recently—as if there were reason for rates to stand up confidently and rise a bit. So all is not bleak.

In fact, all is not anything…essentially. There is no clear direction to the world economy. In Europe, forward movement is fueled by hope. That’s not a fuel that we can trust. In America, forward movement is fueled largely by the fact that the population seems ready to get on with things. Enough of this nonsense.

We’re waiting for a sign. It can be simple…an improved existing home sales report, a reason to believe. But I suspect we get to wait for an uncomfortably long period of time. And we have to keep our eyes on Europe, and on China, and on the Middle East. The world doesn’t dance entirely to the rhythms set by the U.S. economy any longer. And we have yet to figure out exactly how to deal with that fact.

Still, you can refi your car at about 3.24%. You can buy a home at a rate that disappears when you factor in inflation. You can get your finances in order, ready to face the next decade very successfully.

People need to know that. But please, no robo-calls.