"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 unemployment 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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