• 11 hours Did North Korean Hackers Just Steal $13M From Global ATMs?
  • 12 hours Asian Tech Stocks Rebound After A Tough Week
  • 13 hours Switzerland Bans New Audi, Mercedes, Porsche Imports
  • 14 hours Sealing Off The North Korea Smuggling Loophole
  • 16 hours This Tech Giant Is Pushing For Blockchain Adoption
  • 18 hours Venezuela’s Gold Reserves Are Reaching Critical Levels
  • 1 day Brexit Woes Weigh On The British Pound
  • 1 day Forget Turkey, This Is The Biggest Threat To European Finance
  • 1 day There’s No Hiding From Google
  • 2 days Turkish Lira Bounces Back After Qatar Bailout Pledge
  • 2 days What Happens If Tesla Goes Private?
  • 2 days China's Most Powerful Weapon In The Trade War
  • 2 days Can The S&P 500 Shake Off Negative Sentiment?
  • 2 days Standards Go Out The Window As Employers Struggle To Fill Jobs
  • 2 days The Two Trillion Dollar Markets Amazon Hasn’t Conquered
  • 2 days Digital Supermodels Outperform Humans
  • 3 days France Could Lose Billions In EU Trade Route Redirection
  • 3 days Beer Giants Are Striking Out With Millennials
  • 3 days What Is Bakkt And Can It Take Bitcoin Mainstream?
  • 3 days Tesla’s Board Delivers A Stern Message To Elon Musk
U.S.-Turkey Tensions Take A Dangerous Turn

U.S.-Turkey Tensions Take A Dangerous Turn

U.S.-Turkey tensions have reached a…

Time To Buy A Lada? Russian Auto Sales Are Booming

Time To Buy A Lada? Russian Auto Sales Are Booming

Russia’s flagship carmaker was once…

Marty Chenard

Marty Chenard

Marty Chenard is an Advanced Stock Market Technical Analyst that has developed his own proprietary analytical tools and stock market models. As a result, he…

Contact Author

  1. Home
  2. Markets
  3. Other

Something Big Around the Corner?

Interest rates ... housing demand ... housing affordability ... bank loans ...

Headline confusion? ... Here are the current housing related headlines on a Yahoo news search:

Headlines: U.S. existing home sales seen at 10-month high in July. ... Home sales figures level off in July. ... Sales of Existing U.S. Homes Probably Climbed as Prices Fell. ... New-home construction unexpectedly declined last month. ... Mortgage Delinquencies Rise as U.S. Home Prices Fall. ...

It doesn't really look like anyone agrees with what is happening in the housing market.

How about trying to look forward relative to housing affordability? Interest rates have a huge impact on what someone can afford. After all, it is all about how much of a monthly payment most people can pay.

30 year and 10 year yields both are part of the equation of how 30 year mortgage rates are set. Rates are pretty good right now ... 5% and 1 point at some banks.

So, what's in the future for interest rates?

Something big is around the corner ... a large move in the interest rates. At least, that is what the 10 year yield chart is telling us now.

Take a moment to look at the (TNX) 10 year yield chart. A very large triangular formation has occurred. It started in May and it is now working its way to its apex where a breakout will occur.

From a technical projection standpoint, a 9 point move should occur from the breakout point ... up or down. That is a very large move and it will have an impact on housing, automobiles, and anything requiring a loan. And yes ... it will also have an impact on the stock market.

The question is whether the breakout will be up or down?

For the past few months, the Fed has been actively engaged in the market and buying down rates in an effort to feed/nurse an economic recovery. But, this week, Bernanke announced that the Fed would stop their interest rate buy down program by the end of October.

If this market influence is removed, it would seem reasonable to expect interest rates to rise without that dampening influence. If rising interest rates is the direction that could happen, then the affect on the housing market and large financed purchases will be very negative because of the projected magnitude of the interest rate rise.

 

Back to homepage

Leave a comment

Leave a comment