Hello Bloggers, Thanks for stopping by on the weekend. I head rumors of mortgage rate increases and wanted to get the scoop. I asked a lender friend, Michael Martin of WR Starkey Mortgage to update me on what our buyers should be expecting on rates in the next few months. Raleigh real estate and Cary real estate remain a tremendous value. When inflation kicks in (and it will) the home prices we have now will go significantly higher. Add a higher priced home and a higher interest rate and buyers loose the buying edge of today’s historic market.
Here are Michael Martin’s comments about our local financial market ……
Lightning strikes twice! This week the Fed announced that they will purchase an additional $750B of mortgage backed securities (the fed has purchased almost $235B year to date). So, just as it happened in January, rates dipped on the news. However, core CPI (Consumer Price Index – a measure of inflation) came in up 1.8% this week after being flat in January. Even in this economy we still see inflation and that is what keeps upward pressure on rates. And, just as in January, after the initial drop we see rates ticking back up. That’s OK with the FED though as their MAIN goal is to purchase enough mortgages to keep rates in that ‘high 4 – low 5’ percent zone through the end of 2009, but not necessarily push them dramatically lower. The extra time is needed so that congress’ new 105% refinance / foreclosure abatement plan, which is just kicking in, will be able to take advantage of the lower rate environment.
Bottom line – although the media is already spinning it differently, this is still NOT a time to wait and hope for lower rates. Your clients have a short window to grab the dip before history repeats itself and rates drift back up. Regardless, home loan rates remain within inches of all-time historic lows, but may not necessarily move lower based on this purchasing plan – Tell your clients to ACT now and that waiting is a very risky move.
This week the 30 year fixed rate is between 4.5% to 4.75% depending on credit and program type. Have a great weekend
The Martin Mortgage Group
WR Starkey Mortgage
Michael A. Martin Tom Deadmore Tonya Martin
Raleigh Branch Manager Mortgage Planner Mortgage Loan Coordinator
Office: 919-845-2150 Office: 919-845-2150 Office: 919-845-2150
Mobile: 919-612-9978 Mobile: 919-625-1935 Mobile: 919-215-9743
Fax: 866-546-8920 Fax: 866-546-8920 Fax: 866-546-8919
As always, thanks for stopping by today. Call or e-mail us with questions. God Bless. Marti