Its 2010: A New Year

By
Mortgage and Lending with First Community Bank NMLS #405459

Good morning all!  Just a quick thought on the previous year.  2009 was a pretty decent year considering what has happened in the economy.  Of course Montana is usually slower than the rest of the country to feel any ripples in the economy.  But it did hit us.  As far as housing goes, Helena fared pretty well.  Lots of new construction thanks to the $8,000 tax credit.  Rates were very low for most of 2009 as well.  Lots of refinancing took place.

Onto 2010....let's keep our fingers crossed to keep the ball rolling.  Rates are still pretty low and the $8,000 tax credit has been extended until April 30th.  And there is even more incentive that previous homeowners can purchase a new house and receive a $6,500 tax credit (rules apply). 

From what I have read, it seems that the prime interest rate is supposed to start climbing sometime in the 2nd quarter of this year and the 10 year treasury is supposed to hit the 4% range as well.  The Government is supposed to keep buying their share of mortgage securities until the end of March?  The goal is to get more companies to begin to invest again in mortgage backed securities.

My opinion is that once the prime rate goes up and the 10 year treasury rate goes up, mortgage interest rates will increase.  No one knows how much or when but when the government stops buying and the rates increase, our rates will increase.  I don't see how that will stimulate the economy.  Might put a halt to people buying a home?

We hope the rates stay low so we can stimulate the economy in the Helena area and keep getting people into houses...whether it's the first time homebuyer or the repeat homeowner!

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