I am a self proclaimed economics junkie, nerd, enthusiast. I got really excited looking at some recent information about the Economy and Interest rates!
A survey done by CNBC of leading market participants indicates that THEY believe the Federal Reserve will boost it’s balance sheet by about a half a TRILLION dollars in the next six months.
If you are like one of my friends, you are scratching your head going, “and I care about this because….?” Well you care about this because if the Fed does this – a likely benefactor would be LOWER Mortgage Rates.
The Fed stopped buying mortgages in March, and rates didn’t skyrocket… but they just are not going below certain thresholds. The idea is that the Federal Reserve will have to come back into the market in some fashion, and when they do, mortgage rates will likely go lower.
But HOW low will they go? And would a rate at, or near zero, have first time home buyers running to buy like the next $8000 Tax Credit?
“The difference between a 4.5% and a 3.5% mortgage isn’t that great. If we were at 10% and rates fell to 5%,” that drop would attract much more borrower interest. “When you’re talking about incremental declines in interest rates, it does add some [demand] but not as much as you’d think.”
Mr. Bernanke is scheduled to speak this Thursday and there will be even more people listening to his “tone” to see if there’s any hint about deflation and the Federal Reserve”s Balance Sheet. If the CNBC poll is correct, we could get below the current stale mate. Either way, though, mortgage rates are at the historical low point and that’s only ONE of the reasons people are buying in the Raleigh / Cary real estate market!
To find out what you can qualify to purchase in NC, call Steve and Eleanor Thorne, Mortgage Banker in Cary , 919-649-5058. We have the best rates and the lowest fees for mortgage loans in NC Do you think we need a new tax credit? Read this
I try and answer all questions :)