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Hey Joe! Lower Rates Might Help!

"We misread how bad the economy was"

This is the comment made by VP Biden this weekend as he tried to explain why the administration first declared that unemploymentThe Housing Market IS tied to Mortgage Rates would go to around 8% this year and last week we saw much higher numbers... and many folks are saying that the unemployment numbers are actually worse than reported, because so many more American's are parttime employees!

I'm not being a "Debbie Downer" here, I'm merely pointing out that
Paul Krughman and Gordon Brown (who meets with Obama this week at the G8) both said that we need MORE / ADDITIONAL Stimulus based upon the abysmal unemployment numbers (and overall minimal response to the current stimulus package).

The CNBC "Stars" this morning put it this way...

"If we don't get long term interest rates significantly lower, we have no hope of getting home prices stablized. This is a MUST for any recovery."

NOW we're talkin'! From their mouth to Bernanke's EARS!

The way to get mortgage rates in the mid 4's?? Get the government BUYING Mortgage Backed Securities! Last winter, the FED announced that they would purchase MBS, and rates fell like a rock... last month, the FED said ( in effect) that their buying spree might be put on hold, and in one Wednesday afternoon we went from 4.75% to 5.5%!

IMHO, we don't need an ADDITIONAL Stimulus package - but we sure could use MORE of the program that is already approved so that mortgage rates can move LOWER!

If you are borrowing $200,000 at 5.5%, then your P&I payment (30 year fixed rate) is 1136. If you can borrow that same money with an interest rate of 4.5%, your P&I Payment is 1013! I think that's an incentive that First Time Homebuyers are looking for!

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Comment balloon 7 commentsEleanor Thorne • July 06 2009 07:58AM

Comments

Dependence on the government is not the right way to go.

Posted by Dave Edwards (Dave Edwards Realty) over 8 years ago

Yeah, I can see why you might say that - but right now, the only group purchasing Mortgage Backed Securities is the government... they are certainly the most regulated, best MBC security that's been produced, and if no one is buying, the price is not going lower! I love mortgage rates in the 4's!

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) over 8 years ago

Eleanor - it's great to see you back in the writing mode!  You've been missed!  And this is why.  More word needs to get out that lower rates (and even tax credits) would stimulate the economy!  I'm with you - bring the rate back down and watch the move on home buying!

Posted by Lee & Pamela St. Peter, Making Connections to Success in Real Estate (Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522) over 8 years ago

Mortgage rates in the 4's?  Wow - now THAT would be a dream come true!  Like Lee and Pamela said - it is so nice to have you back!

Posted by Leesa Finley, RED Properties - Raleigh NC Real Estate (RED Properties) over 8 years ago

Eleanor,
We could have enlightened them to this a long time ago, right?

Posted by Cynthia Tilghman, RealtorĀ® Onslow County NC Home Specialist (Kingsbridge Realty, Inc) over 8 years ago

Rates do make people buy but the fear of rising rates might stimulate people to buy now instead of waiting until the rates go down. I'm not sure what the answer is.

Posted by Terry & Bonnie Westbrook, Westbrook Realty - Grand Rapids Forest Hills MI Re (Westbrook Realty Broker-Owner) over 8 years ago

Dude!  I think that's part of the game!  Rates go up slightly, contracts restrict... then they come down.  I'm ready for the DOWN part!  HA! HA!  I totally understand that it's a slippery slope we stand upon. 

Just read Matt Heaton for confirmation!

Posted by Eleanor Thorne, Equity Resources 919-649-5058 (Equity Resources) over 8 years ago

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