FLORIDA REAL ESTATE AGENT EXPECTS SEPTEMBER INTEREST RATE ADJUSTMENT

The future of the entire real estate market is dependent on the Fed’s anticipated action next month.  

Predictions are that the Fed will again lower the Interest Rate in September.  

What affect could this change have on the Real Estate market, and where do we go from there?

There will be a great deal of refinancing from ARM’s to 30-year fixed loans.  Those who bought in the past with the intention of reselling before the interest rates increase will be anxious to refinance for 30-years at a low interest rate.  Those who will want to refinance will face more strenuous and realistic pre-qualification criteria, and may need to bring cash to the table to get their loans approved. 

That will be a big change from the recent mortgage loan approval standard was the borrowers ability to write his/her name or make their mark.

Anticipate a surge in property sales, as buyers and investors will scramble to take advantage of a lower interest rate, as no one expects the interest rate to fall below the September adjustment.

On the flip-side, even if the rates do not fall in September, remain steady, or even increase slightly, the affect on buyers and investors should be the same as if they fall - to buy that mortgage before the rates begin to climb insanely, as they have in the past.

Now, what is your opinion?

 

 
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Post is included in group: Walton County, Florida
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10 Comments on FLORIDA REAL ESTATE AGENT EXPECTS SEPTEMBER INTEREST RATE ADJUSTMENT

The rate the fed lowered was the discount rate that it lends to banks reduced from 6.25 to 5.75.

That is different from the fund rate that impacts bank lending rates which the fed has not lowered in close to 3 years. It is currently I believe at 5.25.  A reduction which would certainly be welcomed for it's psychological impact on consumers, will not make the gray clouds blue but it will help our struggling Florida market.  It may even help lower the rising wave of foreclosures from all these ARMS.

Too many folks down here are not in a position to refinance. Their homes won't appraise for what they owe...either due to a decline in value or the irresponsible tendency to use one's home as an ATM.

08/29/2007 02:15 PM by Rick Fifer (FLORIDA EXECUTIVE REALTY)

rates have fallen in the past two weeks --the market has built in the fed rate cut. i don't think 30 year

fixed rates will drop just because the fed cuts in september. the market would have to believe that

future cuts are in store to see long term rates drop further. the 10 year bond today is at 4.53% DOWN

from last months high of 5.32%--MIKE

08/29/2007 02:15 PM by MICHAEL CAREW (NJ LENDERS CORP.)

rates have fallen in the past two weeks --the market has built in the fed rate cut. i don't think 30 year

fixed rates will drop just because the fed cuts in september. the market would have to believe that

future cuts are in store to see long term rates drop further. the 10 year bond today is at 4.53% DOWN

from last months high of 5.32%--MIKE

08/29/2007 02:15 PM by MICHAEL CAREW (NJ LENDERS CORP.)

Thanks Michael Carew for your wise opinion.

Robert Monk 

08/29/2007 02:18 PM by Robert Monk

Good points, Rick Fifer.  Thanks for you opinion.

Robert Monk 

08/29/2007 02:20 PM by Robert Monk

Hi Robert -- I agree with you on rates .  I think we will apporach the lows we had in 2002 and 2003.  I really believe there will be a massive refi market with folks bailing out of junk paper and into FHA.  If you are a lender you had best brush up on your FHA requirements.  Aloha

08/29/2007 02:43 PM by Bruce Bourgault, Vice President, Mpro (Central Pacific Home Loans)

Thanks Bruce Bourgault.  It's always good to hear from you, and I value your opinion greatly.

Robert Monk 

08/29/2007 02:45 PM by Robert Monk Florida Real Estate (100% Realty, Inc.)

Robert:

If they are going to lower the rate it better be a huge reduction.  .25 or .50 just won't cut it. A .75 to 1.0 cut with the hint of continuing smaller cuts in the future should shake things up a bit.

09/08/2007 08:01 AM by ยป Bill Burress Nationwide Mortgage Originator

Again, Mr. Burress, I agree with your wise advice!

09/08/2007 12:55 PM by Robert Monk

Rick Fifer, Thanks for you insight.  I agree with you.

09/10/2007 10:37 AM by Robert Monk Florida Real Estate (100% Realty, Inc.)

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