Dec 9, 2008 Real Estate Report Newsletter for Portland Oregon & Vancouver Washington Economic commentary, Mortgage Rates and News

December 9, 2008

Extraordinary Numbers

The numbers coming out of the markets are absolutely extraordinary. How about gas at $1.70 per gallon just a few months after it was over $4.00 per gallon? How about the loss of over a half a million jobs in one month? In addition, the government looks to be spending about $1 trillion dollars to save the economy from recession. That may include a target rate 4.5% for some purchase loans. The numbers are virtually mind-numbing. These numbers also let us know that it does not make sense to predict what will happen in the future. For example, could a real estate rebound take place in a few months instead of a few years because of lower rates? Our advice is not to even try to predict the future.

Right now rates are as low as they have ever been for fixed-rate home loans. Many are thinking about lowering the rate on their loans. Should you wait? If you purchased a stock at $5 a share and it moved to $8, should you sell now or wait until it moves higher? Of course, if you wait, the stock could go right back down. You just can’t predict the future. Many would be advised to take their profits now based upon where rates are today. At the least, everyone in that position should be making application now so you can react quickly to any favorable moves in the market. If rates go much lower, lenders are sure to get back-up trying to keep up with the demand.

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