Once again, I am publishing a headline that has not yet happened, but very well may be seen in the not-so-distant future. While we are currently experiencing some of the lowest mortgage rates in history, and may even see lower if the government gets their way, do not expect them to remain low for very long. In fact, low rates may be a thing of the past in 2009.
You may have already heard me talk about the “mortgage rate bubble”, a term I coined a while ago. Much of the reason for the bubble will be the fact the Fed will ultimately be the only buyer of mortgage backed securities in their efforts to drive mortgage rates down to 4.5% or less in another feeble attempt to stimulate the housing and mortgage markets. With rates this low, we have seen huge increases in demand for mortgages, but with tighter lending standards, even getting tighter right now, most of these applications will not close and we are not seeing a rush to buy up properties by anyone other than investors. Investors seem to amass the majority of buyers, but tighter lending standards have reduced their abilities drastically.
To read more, head over to the Florida Mortgage Report...
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Robert,
I think you're right. History of the 20th century tells us that when a Democrat wins the White House rates go down for 6 months and the up for the rest of their term, when a Republican wins rates go up for 6 months then go down for the rest of their term. This was always true until Clinton's second term, but he had a Republican Congress.
The economy can't recover until saver's are rewarded at a good rate, but not so high consumers can't afford to borrow the savings. Low rates are great as long as there is money to borrow!
Happy New Year.
Bill