February 2, 2010
Many homeowners and prospective buyers have taken advantage of the amazingly low rates we've experienced over the last year, but fixed rate loans under 5% will likely be a thing of the past. In the last few weeks, the treasury department has reiterated their plans to discontinue their purchase of MBS by the end of March. And without the readily available source of a buyer, the MBS markets will most assuredly see pressure from other investment markets which will cause mortgage rates to rise. It's my expectation that rates will plateau in the high 5's or low 6's by the summer, but count on tremendous volatility while the market attempts to find equilibrium.So for those of you who've had clients expecting home prices to continue to drop, point out to them that unless they're paying cash, they're going to be paying MORE for the home (in the form of higher rates) if they continue to wait!
497 SW Century Drive · Suite 104
Bend, Oregon · 97702
Ph. 541-728-0390 · Fx. 541-728-0395
Oregon License ML-4707 · NMLS # 277334
