Seattle Bubble on 710 with Dave Ross?

[david_mcmanus]

Tim, I don't think you would sound rude at all if you would counter a lot of this stuff. I'm hearing a lot of the "we're special" mantra from Goldy and a lot of the callers. I think you should also have brought up the incomes not keeping up with home prices...you know, the whole financial side of things.

[david_mcmanus]

Mortgage rates are tied to the 10 year treasury note.

[sniglet]

[david_mcmanus]

I was referring to fixed rates. ARMs are tied to LIBOR.

[deejayoh]

ARMs can be tied to many things: LIBOR, COFI, 12-month MAT...

15 and 30-yr fixed generally track to the long bond

[sniglet]

[david_mcmanus]

All mortgage rates (jumbo / non-jumbo) have been going up since late Jan / early Feb.

[deejayoh]

[sniglet]

[The Tim]

Summary: it's complicated.

Which is why I tried to keep it simple on the air, with my response to the effect that mortgage rates are based on the lenders' perceived risk, not the Fed rates.

[sniglet]

As I ponder the issue of mortgage rates a bit more, it occurs to me that one thing that might be confusing everyone is the fact that they seemed to follow treasury rates for so long. But just because two things are travelling side by side for a period of time doesn't mean they are necessarily "linked".

For example, you could observe a brown car that appears to be following a red one for 1000 miles, even turning on the same road exits. However, you could find that the only thing that was happening was that both cars were going to the same town, and once they arrived at the location they split up and travelled to different neighbourhoods. Yes, the brown car happened to be headed in the same direction as the red one for quite a while, but it wasn't actually following the red one.

[mike2]

[deejayoh]

[david_mcmanus]

[rose-colored-coolaid]