Of Oil and Mortgage Banking

This morning oil prices were nearing $100 a barrel thanks to the political crisis in Libya combined, of course, with conflagrations all over North Africa and the Middle East. Normally, rising oil translates into price increases for new homes because it takes gasoline to ship building materials around the nation. But since few firms are building new homes rising oil isn't the concern it once was — at least not to builders. To mortgage bankers and brokers who drive their cars around to visit customers, the oil sting will soon be felt. Will LOs be able to pass on this increased cost of doing business to applicants? We shall see. Meanwhile, rising oil (and the prospect of further spikes) is driving stocks lower and bonds higher — which could translate into lower mortgage rates. Then again, if a new oil crisis hammers the U.S. recovery application volumes could come under further pressure.