Big news hit the wires yesterday afternoon, as the Fed made a blockbuster
announcement. Over the course of 2009 they will purchase an additional
$750B in Mortgage Backed Securities in an effort to help shore up the
housing market and keep home loan rates low.
Their actions are intended to keep a lid on interest rates and although the
rates dropped on the Feds announcement yesterday, it may not necessarily
push them dramatically lower in the future.
Since yesterday's Fed Meeting the US Dollar has gotten clocked in the global
market, as this aggressive Fed move appears to be quite inflationary. While
we know that there is no inflation at the present time, the chatter of
future inflation could have a negative effect on mortgage rates.
Bottom line - although the media is already spinning it differently, this is
not the time for clients to stay on the fence, hoping and waiting for lower
rates. Home loan rates remain within inches of ALL-TIME historic lows.
Waiting is a risky move.
With rates at historic lows and houses on sale, now is the time for your
clients to get off the fence and buy!