Tuesday, September 25, 2007

Mortgage Interest Rates Up? Down? What?

The fed cut rates for the first time in 4 years!!!!!
By .5% too!!! And sooooo what? Are mortgage rates lower? That is the question most people want answered. The answer is sadly no. Short term rates get affected immediately, so the monthly and one year ARMs will eventually adjust down. The most popular 5, 7, 10 and 30 year loans will not come down. There is now fear of inflation due to the rate cut which means investors will not oversubcribe offerings of the longer term notes - which tips the see-saw toward higher interest rates. Frustrating, confusing, yes and yes. I do believe that the housing market has been beaten up and will rebound next year. This is definitely the time to consider going long in real estate - IE: buy.

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