Many people got nervous on Wednesday, May 27 when mortgage interest rates rose.  During the day our office received repeated notices from various lenders about price changes for the worse.  As mortgage consultants, we fielded calls from clients with loans in process.  We had enjoyed such low rates for a long time, clients were worried that they had come to an end.

Of course we know that rates rise and fall in the short term, so we were hoping for rates to come back down.

Sure enough, on Thursday morning rates were slightly improved, and Thursday afternoon and Friday we received numerous notifications of pricing improvements.  Interest rates have not dropped to Tuesday's levels yet, but I think they will.

There are many forces at work trying to stimulate the real estate market into recovery.  Just as real estate activity often leads the economy into a downward spiral, it also can lead us into recovery.  Recent reports state that more and more "prime" loans are going into foreclosure.  We cannot just blame sub-prime and adjustable rate financing for causing problems for borrowers. Increasing unemployment is a major factor now, as homeowners just don't have the income to make their mortgage payments.

Let's hope the "experts" pulling the strings on the flow of money can be successful at keeping rates low. Otherwise, there will be a glut of foreclosed properties sitting on the market with fewer buyers who can afford them.