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Answers (15)
- Louis Wolfson, "Louis Wolfson"
- Contributions:173
EVERYONE seems to agree that rates are very low. Everyone that has a loan should refi and take advantages.
If its not rates that are holding back buyers, what is it?
Jobs?
They can't sell what they own now?
More foreclosures?
Scared Prices will drop further?
All of the above
If its not rates that are holding back buyers, what is it?
Jobs?
They can't sell what they own now?
More foreclosures?
Scared Prices will drop further?
All of the above
- Jose Smith Jr, "LB HB REALTOR"
- Contributions:140
Intriguing question. I wouldn't wait to find out. No one can ever call any low but you can celebrate the wonderful place we are in the market right now. You cannot argue prices have come down and so have rates. Depending on the time someone plans to remain in the home, this markets rates are a no brainer. I think we may see lower but that is probably not going to happen around election time. The celebration of new Govt means folks are more optimistic, whether that really means anything new will happen. Optimism equals higher rates.
- Pasadenan
- Contributions:21458
"are the low rates helping people buy or are those that have mortgages just refinancing." -
Though it appears that refinancing is more popular presently, the low rates have had the effect of propping up housing prices and slowing the rate of the bubble decline, which was the Fed & government intent.
They want to drag out the pricing correction as long as possible.
Though it appears that refinancing is more popular presently, the low rates have had the effect of propping up housing prices and slowing the rate of the bubble decline, which was the Fed & government intent.
They want to drag out the pricing correction as long as possible.
- Louis Wolfson, "Louis Wolfson"
- Contributions:173
My question is are the low rates helping people buy or are those that have mortgages just refinancing. I saw more buyers out there with the 8,000 tax credit, which I didn not think it would have the effect it did even in our higher end market.
- Pasadenan
- Contributions:21458
As Dan pointed out, the Federal Reserve has the ability to play with the interest rates. And they've already stated they plan to drive the rates lower, so of course they can go lower. 3.5% fixed rates is not "unheard of". I've even seen 3% fixed rates with no payments due until death in this area. Of course the ones I saw at that rate were "subsidized", but that is what the government and FED has chosen to do, subsidize the rate.
How low "can" they go? then can go to 1%. But is it likely? I never expected treasure bills to be sold with 0% interest, yet it happened.
Last February I was stating the "bottom" of rates was 4.385%, and that they wouldn't go lower as the lenders would lose money below that point. (That was the Thanksgiving 2009 low). Yet with the Federal subsidies, it is clear that the rates broke that barrier, and that the government and Federal reserve plans to drive them down even further. I'm now anticipating 3.5% sometime within the next 6 months. (No, I don't expect them to stay there, so if one wants it, they need to get their approval processed with a loan officer, and then let the loan officer know the target so they can lock it in when that target arrives).
And with unemployment continuing to be high, and still a backlog of delinquent mortgages, it is quite likely we will see 3.0% fixed 30 year mortgages sometime within the next 3 years. The lenders and U.S. are not in a "vacuum", so a lot depends other events throughout the world.
There will be no "Nixon Shock" this time. And the last 2 wars only had a temporary economic stimulus impact which was not sustainable, thus another war will not be the answer this time either even though 2 more are presently being planned.
There are some very simple solutions, but the political backers will not accept those.
But why borrow money at 3.5% annual interest when the banks will pay less than 0.5% interest if one doesn't need the loan? As they say, the borrower is slave to the lender.
How low "can" they go? then can go to 1%. But is it likely? I never expected treasure bills to be sold with 0% interest, yet it happened.
Last February I was stating the "bottom" of rates was 4.385%, and that they wouldn't go lower as the lenders would lose money below that point. (That was the Thanksgiving 2009 low). Yet with the Federal subsidies, it is clear that the rates broke that barrier, and that the government and Federal reserve plans to drive them down even further. I'm now anticipating 3.5% sometime within the next 6 months. (No, I don't expect them to stay there, so if one wants it, they need to get their approval processed with a loan officer, and then let the loan officer know the target so they can lock it in when that target arrives).
And with unemployment continuing to be high, and still a backlog of delinquent mortgages, it is quite likely we will see 3.0% fixed 30 year mortgages sometime within the next 3 years. The lenders and U.S. are not in a "vacuum", so a lot depends other events throughout the world.
There will be no "Nixon Shock" this time. And the last 2 wars only had a temporary economic stimulus impact which was not sustainable, thus another war will not be the answer this time either even though 2 more are presently being planned.
There are some very simple solutions, but the political backers will not accept those.
But why borrow money at 3.5% annual interest when the banks will pay less than 0.5% interest if one doesn't need the loan? As they say, the borrower is slave to the lender.
- John Cantero, "MarketingSpecialist"
- Contributions:189
Nobody really knows but my gut is telling me we are near a bottom and I feel that alot of people will look back at this time as a missed opportunity.
- hpvanc
- Contributions:2579
It will depend on economic inflation/deflation. Currently we are at 0% inflation/deflation, if general economic prices continue to deflate they will go lower, if the Fed succeeds in getting inflation to take hold they will rise accordingly. Note that the Fed has been trying to restart inflation for 3 years now.
- Dan, "the_country_hick"
- Contributions:4697
Ask the federal reserve. Then ask those who buy government bonds if they still have faith they will be repaid.
The federal reserve has said it will do all it can to keep rates low and likely drive them even lower.
No one knows what will happen. Rates go up a bit. Rates go down a bit. They still remain very low.
The big key most miss is that when interest rates increase buying power decreases. Going from 5% to 7% interest rates decreases buying power by 23.9%. Since we are below 5% rates now that means buying power, and thus house prices would drop by over 1/4 once interest rates normalize.
The federal reserve has said it will do all it can to keep rates low and likely drive them even lower.
No one knows what will happen. Rates go up a bit. Rates go down a bit. They still remain very low.
The big key most miss is that when interest rates increase buying power decreases. Going from 5% to 7% interest rates decreases buying power by 23.9%. Since we are below 5% rates now that means buying power, and thus house prices would drop by over 1/4 once interest rates normalize.
- Deborah Garvin, "loanmonarch"
- Contributions:438
They might go down. They might go up. Or, they might stay the same. Trying to time the bottom of the market is just about the worst investment strategy in the world...and, certainly has cost a lot of consumers a lot of money. Forgive my flippancy, please! But I really do believe we will all be hearing a lot of "wish I, shoulda, coulda in the future.
- Victor Gurrola, "Victor T. Gurrola"
- Contributions:1190
Who knows anymore Sunnyview makes a good point but then the unemployment number rose and so did the stock market, when usually it does the opposite. So we hope it stays cheap but like sunnyview said not so cheap that it doesn't stir up private money.
- sunnyview
- Contributions:25139
I cannot see rates going below 4% by more than an 1/8. It seems you get to the point where no one wants to buy mortgages that have such a small return for 30 years. Of course, the government can buy as many as they want, but they risk inflation in going too far.
Historically, they are pretty darned low right now here.
Historically, they are pretty darned low right now here.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Jaclyn,
How high of a percentage will home values continue to fall?
How high of a percentage will home values continue to fall?
- wayne lancaster, "funds2"
- Contributions:1177
The good news is does it really matter! Can't imagine any homeowner with a 5.25% or higher current rate and planning to be in the property for the long term, not taking advantage of these historically low rates. Qualified homebuyers have similiar opportunity, as home prices are stabilizing/rising in many areas of the country. Waiting in those areas may be good advice for river boat gamblers, former Bernie Malouf clients, and Chicken Little theorist............ GO RANGERS!
- REG ANDERSON, "RegSML"
- Contributions:122
From what I have learned talking to several lenders, they feel it is about as low as it will go right now. The Feds cannot go any lower, and the banks are not willing to and do not need to. The problem is convincing Sellers that they need to sell for what they can now, to reap the rewards of the low prices and interest rates now. There is simply no urgency unless they are in situations like Relocation or Divorce.
- Ed Brophy, "Ed Brophy"
- Contributions:455
No one has the magic crystal ball that will tell us how low rates will go. Some experts are predicting we'll break the 4 barrier and stay for a while. Some are saying by the end of the year and through mid to end 2011 maybe 2012.
How low will interest rates really go???
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- 5.0/5.0
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