“Mortgage Interest Rates to Remain at These Levels”
Article after article continues to indicate, interest rates will continue at these levels for the next couple of years. The concern that I always have, when everybody is saying the same thing, that is when I become the most cautious.
Having said that, mortgage rates are at historic lows. First time home buyers are able to find home and many end up with a mortgage payment, below what they are paying for rent.
Some homeowners that owe more than their home is worth, may be able to get some relief from the revised HARP program, after March 15th. We are still waiting to see what the guidelines will be. Contact me, if you have questions.
FOMC to Maintain Low Interest Rates Until 2014
Members of the Federal Open Market Committee (FOMC) decided Wednesday to keep interest rates between 0 percent and .25 percent until 2014, even while the economy steadily improves.
All but one of the Fed’s governors voted to extend the policy enacted last fall for another two years, where originally the central bank had determined to delay higher interest rates until 2013.
Richmond Fed president Jeffrey Lacker dissented from the voting majority, preferring to hold off on revealing how long the Fed wanted to maintain historically low interest rates.
The Fed said that it made the decision in lieu of evidence from
December that showed unemployment remaining steady.
“Strains in global financial markets continue to pose significant downside risks to the economic outlook,” central bank said in a statement, referencing debt crises in eurozone countries.
The Fed added that it “expects economic growth over coming quarters to be modest and consequently anticipates that the unemployment rate will decline only gradually.”
FOMC members said that growth in the housing market and business investments countered any strength in household spending that the Fed saw in December 2011.
The central bank pledged to continue reinvesting agency debt holdings in agency mortgage-backed securities in order to stimulate the markets.
Asked whether the decision would help lift or stall markets, Tim Rood, a partner with The Collingwood Group and former EVP with Fannie Mae, said that “there’s no doubt that it’s good for housing.
“It’s going to help in terms of the housing recovery to keep affordability as low as humanly possible,” he tells us.
Experts said in past interviews with MReport that the decision to time historically low interest rates would serve as a disincentive for investors, who would feel no rush to buy up U.S. Treasury debt or invest in securities.
image 1: vichie81/freedigitalphotos.net
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