The biggest question I get is where are interest rates headed? Well I believe they will start to gradually increase soon. There are a few reasons for this but the biggest is the Fed will soon stop their mortgage backed security buying program and start to sell them. This will push rates higher. In fact Ben Bernanke talked about this last week. I do believe that many people will regret waiting to better their financial situation for the long term if they don't act soon.
So far inflation has been subdued but how long will this last? Eventually with all the spending that is going on in Washington DC something has to give right? US consumer spending increased for the 5th straight month through February. But incomes so far are unchanged.
Some good news is that the government is really encouraging short sales vs. foreclosures, this should help keep home prices from falling even more in certain areas across the country. The government is planning on rewarding the banks for agreeing to a short sale as opposed to foreclosure. Of course the banks really don't want to foreclose if they can avoid it they will.
Key dates coming up-
1.The Federal Reserve will stop buying Mortgage Backed Securities on March 31st which means home loan rates may be on the rise, due to lack of demand for mortgage bonds.
2.The Homebuyer's Tax Credit of up to 8,000 dollars is due to expire on April 30th.
You may reach me at dan.chapman@legacyg.com
Sincerely, Dan Chapman
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