Your Cash flow analysis today, may not work into the summer months.
I am not a financial expert, but I have some important information I need to share. Much of this information is found in the news, being careful of the message spread through media and on the internet, but the facts the financial experts share concerns me.
We are experiencing historic lows in both Mortgage interest rates and Home prices (based on average income). As a direct result of the sluggish economy, the corrections we have been experiencing are working to the benefit of the many. Pay less, and get more for your money. But, do not hold your breath for too long, there is change coming; not the good kind.
Do not be complacent, you must educate yourself about the history of what keeps rates low and what makes prices climb. Google it, if you need to. That said, look at my attachment, it is a graph of mortgage rates and what they have done over the last 9 years. Look at the anticipated rate climb in June; this could happen again any time after April. There are economic activities that cause rates to creep up, and I think we are about to experience a few of them at the same time.
First, as I understand it, The Federal Reserve Chairman Ben Bernanke has confirmed the plan to stop buying mortgage-backed securities; at the end of March 2010. This lack of stability in that market will most likely de-stabilize the mortgage industry; rates may start climbing in April, May or June. This means your once affordable house is now possibly slipping out of reach and you may have not known it.
Second, it is no secret that China has slowed down purchasing Treasury securities; they used to be the largest buyer, but now only the largest holder. With the US backing out of shoring up the financial institution in March and China slowing down their support of our financial system, I believe we are headed for a period of interest rates climbing that will destroy many American dreams; today they are within reach, next month maybe not.
Last, many economic and financial experts are warning about hyperinflation; this is when prices rapidly climb and the value of money drops. Interest rates are in the double digits and it takes a long time to recover from this type of situation. Our country could avoid hyperinflation, but there are still many negative economic indicators present. What this means to me is, rates will climb, prices could climb, but nobody knows for sure how much or how fast prices will inflate.
I have a few clients that are on the fence, and if the interest rates go up, and prices go up, they will find themselves in a part of the market that they will not buy in. One step down in quality gets you a home that is not up to your own standards; quite a challenges when prices start climbing. If you are one that is on the fence about refinancing, or buying a home, this should get you off in a hurry. Act now, act swift and sure; hire your Real Estate Professional today and take advantage of the First time buyers or moving up buyers tax credit, there is very little time left.
I will always make myself available for your questions, and I have a few different lenders to refer you to; your goals are my goals. I hope to talk with you soon
JonErik Johnson
Keller Williams Realty Kirkland
Direct 425-442-2964
1-877-694-8273
jonerik@live.com
http://jonerik.eastsidepowersearch.com
Founder, Chair
Eastside Business Project
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