Where are rates?

We’ve gotten many calls and emails over the past few months asking where rates are.  People keep hearing in the media that the government is going to make rates go down to 4.0%.  The bad news?  The government doesn’t dictate interest rates, the market does.

However, the announcement two weeks ago that the Fed will buy $300 billion in Treasury securities over the course of the next six months coupled with the purchase of another $750 billion of mortgage-backed securities has pushed rates on many conventional mortgage programs into the 4%’s.  The Fed has been buying what it needs to buy and investing where it needs to invest to help influence rates this low, but again, he can’t make them do anything. 

Now is a great time for people to refinance or go out and buy a house if it makes sense for them because interest rates are so low.  It is important to remember though that with all of the recent changes to the lending environment, not everyone will qualify for the best rates.  This can be frustrating but the reality of how the lending environment is dramatically changing, and has been changing over the past year and a half.

Will we get 4.0% interest rates?  Maybe, maybe not.  But if it makes sense to refinance or buy a house now, we recommend a good, hard look at it.  Very easily in the near future rates will be dramatically higher and stay this way for many years.  It would be unfortunate to miss the boat of home ownership when it was affordable because someone was waiting for the “bottom.”  When we know the bottom has hit, you will have already missed it!

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