Mortgage Rate Lies
By Tim Dexter on Mar 31, 2008
Not so much a how to today - that comes tomorrow; more along the lines of comment. Im charting again but looking at some interesting data. The data in question is the US Mortgage rate - I was chatting to Leslie our documentation guru last week. She mentioned that she had been shopping around for a refi on her house. One vendor told here not to bother right now and to wait until September. Pourquoi? Asks Leslie - 'because the rate always falls in September in an election year!'
Huh? So the mighty Fed that sets interests rates and acts, I thought, independently of government is swayed by 'election years' and lowers the cost of borrowing just before the election and affects the worlds economy to boot. Who benefits? other than the consumer that is. Maybe the fastest candiate off the blocks can claim that they helped sway the Fed in their decision. I couldn't see it.
After a bit more discussion it was thought that maybe it only falls when an incumbent is running for a second term. Maybe George had a quick word with Greenspan in 2004, 'lower the rate there feller, just for old times sake?' Reminds me of our yo-yoing gas (petrol) prices here where Im damn sure the government steps in when OPEC gets a little too greedy.
Being the consumate skeptic I was out googling, looking for historical rate numbers. I alighted upon the USTreasury web site which posts such numbers and they have rates back to 1990 in an XML format to boot; even better, the XML has been generated by an old friend - Oracle Reports.
Time to get busy with a template and check out this claim. Here's the full 17 years worth:
Its a busy chart with more than 4500 data points - I'll address that tomorrow.
Looking in at Nov 2004 and Nov 1996 for messers Bush and Clinton
I have included some data leading up to the election date but I can not see a change either way? Its not a scientific study but maybe the incumbent does not have the influence afterall ... phew! The only thinkg I can see is a steady rise continuing after Bush got back in, there may even be a jump ... but Im an impartial observer and quite obviously know nothing!
Tomorrow the crux of why I was looking at this data using our charting engine - how can we smooth it out a bit for users?