Is It A Mini-Bubble And Why It Matters

If you have been reading or listening to the news in the past thirty days, the big economic news is that the bond market has gone to hell and mortgage rates are on the rise.  The mortgage change began in February but then just as quickly lost speed as March turned into April.  But if you look at the market in the last two weeks rates shot up 10% from 3.4 to 3.8 percent.  Most of us are not looking to buy a house this Spring so in one sense we don't care, but if you are getting divorced and discussing the value of your home, there is an interesting collateral effect as the Federal Reserve signals that "cheap money" (they call it "quantitative easing") comes to an end.

For the first time since 2007 buyers this Spring found that some houses were actually the subject of bidding wars while others sold at or near asking price.  Our experience is that this has not occurred across the board but principally with desirable houses in desirable neighborhoods.