Start of the New Year

It seems that we all are getting back to work after the holidays. Mortgage rates continue to jump around historic lows creating a demand for refinance and purchase mortgage business. I have seen an uptick in home buyers calling for prequalification this week. I think it is important to stress to clients that these low rates are a product of the FED’s commitment to buy Mortgage Backed Securities (MBS.) The Fed will start buying the MBS this month, creating a market out of thin air. Once the FED runs out of money look for mortgage rates to being to increase, to reflect current market conditions. I hope that they will be able to keep rates low through out the remainder of 2009. These low rates will give consumers incentive to purchase a home. Other important factors making home ownership a great decision right now are the first time tax credit, plenty of inventory and that homes are “on sale.” All these factors do not happen often and now is the time to purchase.