Will We Really See 4.5%?

Do you think the reports that we’ll see interest rates on 30 year loans go down to 4.5%? Many home buyers are hopeful, that’s for sure.

It’s been all the buzz in the media lately, that the Fed will start buying mortgage-backed securities, and that the Treasury Department is looking at plans to ‘revitalize the U.S. home market’.

If you want to learn more about what’s going on in the local real estate market, or are ready to have someone listen carefully to your real estate plans, please call or email me today; I’d really like to know what your thoughts are, and what you need.

We may see some increased activity very shortly due to both the rate drops on home loans we’ve seen so far, and the expected drops in rates. The peculiar thing is, even the Wall Street Journal is using vague words in their reporting of the matter.

Phrases like, ” considering a plan” and “according to people familiar with the matter”, continue to lace the national media’s reporting of the subject.

Our local economic guru, Lou Barnes, was as optimistic as I’ve ever seen him lately. One the Wednesday just prior to Thanksgiving, his weekly economic report came out with the news that the Fed announced it would begin to buy mortgage, and other private debt securities.

Lou called this “easily the most dramatic and unprecendented action taken by the Fed in its 95-year history”. That’s big news, especially coming from Lou. At least in my opinion, given that I’d consider Lou somewhat conservative and well, not what I’d call necesarily overly optimistic (perhaps more of a realist in the parlance of Donald!).

Apparently the only time the Fed has taken similar action was just after WWII.

Sounds like a pretty good reason for optimism.

That’s also the angle I’m seeing from some of my buyers right now also. While interest rates are at another all-time low these last couple of weeks, some buyers are holding out for the rumoured 4.5% promised by the media reports of late.

In contrast, the lenders I know have been telling me they’re swamped with refiance calls. Nora Ziel at Cherry Creek Mortgage said she spent an entire day of her Thanksgiving vacation on the phone and working with clients on refi’s due to the rate drops.

Same went for the staff over at TRG Title. I was in their office near the 28th frontage road using one of their offices for some drop in work (I’m still waiting for our RER offices to get finished over on 15th street!), and Paige at TRG said that she had 20 new files in one single day last week. That’s a remarkable number of new transactions in a single day for any title company.

Business is up, and it’s certainly being fueled by our very stable local economy, and fairly flat real estate prices. While some of you will wait, thinking that the magical 4.5% rates will be your loan rate pay-dirt, I’m noticing a lot of you are taking advantage of the already low current rates.

If you are planning to buy or sell real estate soon, and want to get some straight answers to your questions about the current state of the real estate market and local economy, please give me a call or an email now. I’m ready to hear what you have going on today.

-Zachary Epps, full-time professional Realtor® and EcoBroker®

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