Negative Rates? Strong Home Sales, Rates Flat

Global Interest Rates – Jyske Bank in Denmark announced it is offering a negative interest rate on a 10 year fix with a ‘strong equity position’. Of course this is after fees but it’s interesting to think that you could take a loan on your house for another investment and get paid to do so! They are also offering a 20 Year fix at 0% and 30 Year rate is 0.5%. The principal and interest payment on a $350,000 loan with 20% down would only be $838 for a 30 year fix. If you got an attractive 3.5% here (I’m sure they are factoring in some points) you would be paying $1,257!

Rates – held steady this week. There looks to be a slight improvement Today after China announced additional Tariffs on US goods.

Fed Chair – Jerome Powell says certain members are calling for rate cuts while others are advocating to hold. He mentioned global economic slowdown, low inflation, and weak manufacturing in his comments today. The Bond market reacted favorably.

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Home Sales – year over year sales are up (0.6%) for the first time in 17 months as July saw a large increase of sales from June. Total inventory came down by 1.6% especially in lower priced homes and supply is at 4.2 months (down from 4.4) This mean that if homes continued to sell at the current pace with 0 new listings inventory would be exhausted in 4.2 months.

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