Mortgage interest rates continue to rise. And today’s expected Fed rate cut is unlikely to help any of that. Mainly because the Fed rate cut will be dealing with rates that are for loans more short-term than a mortgage loan. (HELOCs, though, should see some decrease.)

Right now, it’s just a fact that between liquidity problems and the failure of the government’s backing to make mortgage backed debt more palatable, mortgage interest rates are on the rise. Here is what Mr. Mortgage at the Mortgage Lender Implode-O-Meter points out about mortgage backed debt, interest rates and the housing market:

Whatever the case, Agency debt and mortgage backed debt is being
shunned.  And if this does not turn around, the housing market will
become even less affordable forcing values down that much more setting
off even more loan defaults due to the dreaded negative equity effect.
Housing remains unaffordable enough without 8.5% rates coming into the
picture.

I do think this is somewhat interesting, however. Back when my husband’s parents bought their first (and to this day only) home, mortgage interest rates were 12% — with a large down payment and reasonably good credit. They would have loved to get 8.5% on their mortgage loan.

My, how times have changed. We expect debt to be cheap and easy.