Early yesterday I received an email from a lender saying rates dropped to 6%, which I thought was good news, by the end of the day the 30 year fixed rate had dropped to 5.5% - this is very good news. Rates are one of the most important factors in determining the affordability of a home - a 1/2 point drop can equate to a over a $100 per month drop in a house payment - that is big.
So why the did the rates drop? It is because the FED took over Fannie Mae and Freddy Mac. The FEDS said one of their reasons for taking this action (when they announced the takeover of management of FNMA and FHMLC) was that while the Feds have lowered short term rates and these entities have not passed on savings to consumers. That makes me think the Feds felt rates should be lower on 30 year fixed loans, and they feel the mortgage giants were trying to pocket the difference to try to make increase their profitability. Certainly if that is true it was hurting the real estate market - and getting the real estate market going again I think will be a key to getting the economy back on track.
This is only a first step in bringing back the real estate market - but I am glad to see it take place. Kramer on TV called this a couple of weeks ago.
Let me know if you need a good mortgage company - I have three I recommend .
If you want more information on selling your home visit www.FosterHomeInfo.com
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