Interest Rates are Falling!!
Posted December 4, 2008 12:08 a.m. EST
Updated December 4, 2008 12:14 a.m. EST
Interest Rates are falling! Interest Rates are falling! The Treasury has finally listened to our industry pleas...
Finally – some relief for our downtrodden industry. Could this be the catalyst of fiscal stimulus which the US Economy has needed in order to help housing get back on its feet?
Quite possibly. Here’s why…When credit becomes less expensive (rates drop), the number of credit-worthy borrowers who gain a ticket into the housing entry pool expands – and we all know that there is strength in numbers.
Those qualified borrowers then begin to purchase homes or refinance their existing homes – thereby creating demand in this limping housing market. Demand creates more balance on the supply side – it also means that consumer confidence is returning to the marketplace – so for all those consumers who took cash out during their refinance transactions, they now have spending power and feel like using that spending power to put liquidity back into the consumer spending stream – trips to Home Depot, Wal-Mart, your local crafts store, etc. So now the oil has reached the squeaky wheel and the previously hibernating economic engine now begins to see signs of spring and wake up.
The cycle is contagious and we are now boarding the “Save our Economy Express” – and things begin to improve for everyone.
While that’s a very simple example of how this could work, the main point I want you to take from this is that Interest Rates are LOW! VERY LOW! So if you think you could benefit at all from a lower interest rate, or you are in the market to purchase one of the many “buyers market” homes on the market today, now is a great time to be talking to your mortgage and real estate professionals.
Get pre-approved and make sure you’re in constant communication with your Mortgage Professional. We are flirting with historic lows, approaching where we were in 2003 (the last great year for interest rates). And if the Treasury has its way with long term rates, we may be fortunate enough to see them go just a little bit lower in the coming days, weeks and hopefully many, many months.
Jeremy M. Salemson
Corporate Investors Mortgage Group, Inc.