A recent article on Bloomberg News illustrates how Buyers are taking advantage of low interest rates to purchase new homes or refinance their mortgages.
According to the article, sales of existing homes were up 9.6 percent in May compared to a year ago, with 4.6 million homes changing hands at a seasonally adjusted annual rate. This also includes a 15 percent rise in contracts to buy existing homes, indicating that the market will continue to improve.
The data suggests how Fed Chairman Ben Bernanke’s low interest-rate policy is likely beginning to finally save the housing market from a six-year decline and providing a boost to the overall economy. Home buyers are benefiting from record-low mortgage rates and are taking advantage of the situation.
Michelle Meyer, Senior U.S. Economist at Bank of America, stated, “The Fed is very much focused on the housing market because that’s typically the best way to channel low interest rates – through home sales and refinancing. We are seeing some signs that the credit channel is unclogging modestly, and the Fed is going to be quite pleased with that.”
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