When it comes to Real Estate mortgage interest rates this was one of the most volatile weeks we have had in the past several years. We are seeing the fundamentals of Economics 101 starting to break through and affect the Maui Real Estate market. If the Treasury continues to print money and flood the market with government capital to drive down rates, you will get inflation, hence ultimately higher real estate interest rates. I am not suggesting that we are out of the bad economic times by any means, but I will say that there could be a light in the horizon.

The last thing the FED wants to do is have the real estate mortgage interest rates go up as we are just starting to get steam in the engine (real estate market). Forget that the train hasn’t even left the station. Having said this, the FED will be forced to continue to buy and sell their own bonds to artificially hold the rates down or around 5%. This will result in higher interest rates ultimately.

You will see that we have increased by a .25% since last week. If I were writing this commentary yesterday the rates would have been .5% higher!!!! The 10 year Treasuries rose 52 basis points in 48 hours causing a total melt down in the bond market and causing lock desks to panic and close.

I know I constantly stress that this is as good a buyer’s real estate market as it gets. This bump in rates just solidifies that position.

I hope you have a great weekend planned. Please let me know if I can assist in any way.

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