CHART: Mortgage Rates Are Going Crazy - Business Insider

CHART: Mortgage Rates Are Going Crazy - Business Insider

Bernanke did this on purpose to limit the affects of hot money that is grossly misallocated into housing. As I posted in response to this article:

Simple, Bernanke wanted the hot money to exit real estate, while keeping interest rate swaps profitable for banks. What better way than to divorce risky assets from less risky assets. That is what Bernanke did on purpose. The 10 year yield is falling while misplaced hot capital is leaving junk bonds and housing.
So, while Bernanke does not want to kill housing, he knows that 20 percent YOY rises in house prices are unsustainable. He got the message from NAR, when the RE folks said prices were rising too quickly.

But when hot money leaves a market, anything can happen. When folks on CNBC say that housing can be flat and stable and intersect the trend line for price increases, it is much more difficult to do so when there are only cash and easy money buyers. There aren't too many 20 percent down buyers who bring stability to the housing market.

I expect the roller coaster of up and down prices to continue. That can hurt the average guy and makes housing very speculative. 


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