I get asked all the time why are mortgage rates not falling as the government keeps cutting the federal rate? It does seem strange doesn't it?
Here's an excellent article in Money Magazine about why mortgage rates don't follow the Federal Reserve rate.
This is a short article that's actually easy to understand. The short answer is that mortgage rates are driven by investors' perception of the risk of long-term inflation. The higher inflation risk they perceive, the higher the mortgage rates will be.
By the way, we are continuing to see an upsurge in activity from both buyers and sellers in the Denver real estate market. It looks like Denver really is leading the country out of the real estate pull back.
Bob Bandy
