Save The U.S. Economy… Buy a House Today
January 29th, 2008 categories: Buying Your House, Redding, Ridgefield, Talking Real Estate, Wilton
Well, the Fed got serious last week when it cut interest rates ¾ point. Simultaneously, our President proposed a package to jump start the economy to “avoid” recession. Too little, too late?
The ¾ point Fed Funds rate drop from 4.25 to 3.5 is a big step in trying to get buyers to get off the fence. This rate cut means that anything tied to the prime rate like credit card interest rates, mortgage rates, auto loans, & personal loans will
become less expensive.
Mortgage rates for a 30-year fixed mortgage are now on average 5 - 6 %! This matched with the fantastic variety of homes on the market and the adjustment in home prices of the past 2 years makes this the best time to buy a home in decades!
You may be happy that home prices have declined if you are looking to buy a house anytime soon. But…as soon as you become a homeowner, you will change your tune before the ink dries on your mortgage note.
When home sales rise, inventory decreases and prices begin to rise. When values rise, equity in your home also rises. When you have more equity, you are happier and more confident and feel comfortable spending money. When people spend money (wisely), the economy grows. When the economy grows, home prices continue to rise…and so on, and so on!
If you have been waiting for the right time to buy your home…this is it! Pick up the phone, call your Realtor and put in an offer. It’s the patriotic thing to do!
| Discussion:
You can leave a response, or trackback from your own site.
View Rob's profile
Brad and Rob - I love Real Estate Chocolate! You continue to impress me with your new and innovative ideas. Bravo! Thought I’d add a comment on the Economic Stimulus legislation. Part of that legislation calls for raising conforming loan limits to as high as $729,000. That’s huge for borrowers. Let me explain why. Currently, conforming loan limits are loan for <= $417,000. Anything above is considered jumbo. And the mortgage market has conforming interest rates and jumbo interest rates. Here’s the good part. A conforming 30-year fixed rate, zero points, is about 5.75%. But a jumbo 30-year fixed rate, zero points is 7.00%. Yikes! So how does this new legislation help us? It helps by increasing the conforming loan limits from $417,000 to $729,000. If this legislation is signed as is expected, many borrowers in our area are going to be able to get the 5.75% rate instead of the 7.00% rate. Very big savings for these borrowers. This legislation has passed the House and is being debated in the Senate today. It is expected to pass and expected that the President will sign it on 2/15. I’ll keep you posted. And again guys, great job on Real Estate Chocolate. Love your innovation and really love your success - any chance I can get coaching lessons from you? LOL. Best wishes guys!