Posted by: Bill Cady | February 19, 2010

Fed’s Raise Interest Rates!

Looking to stay up on the latest real estate market news? Maybe you are looking for a qualified, experienced Meridian Idaho Realtor who KNOWS the real estate world? Either way you’ve come to the right place! Bill Cady is YOUR Meridian Realtor – he can help you find the best homes in Meridian Idaho, homes in Boise, and real estate throughout the Treasure Valley! Bill specializes in one-of-a-kind Idaho area homes and Idaho property and has a deep working knowledge of Foreclosures and Short Sales. Whether you need to sell your current Idaho Home, or want to buy a new home in Eagle, Bill Cady can help you find JUST what you have been looking for. Now, on to the latest news:

The Federal Reserve announced on Thursday that as part of an exit strategy to begin “normalization of the economy” it will raise interest rates on short-term loans to banks — sending stocks across the world tumbling and raising fears that mortgage rates may also increase.

Even though home mortgage rates are at record lows, the Federal Reserve’s recent actions point to a change in its policy of bailing out all of Fannie and Freddie’s mortgage-backed securities. It has been this practice which in truth has kept mortgage rates artificially low. However, it has also helped homeowners riddled with past due mortgage payments and buried under debt.

The move came as a surprise to many, what with the financial system is still treading on eggshells. The carbon scoring left on the sector by the credit fiasco will be difficult to recover from. And even though this move will not have a direct effect on home mortgages, auto loans, or credit card rates, the stock market is already overreacting.

Current Mortgage Rates

Mortgage rates continued to drop for the second week in a row. This is a good sign of a recovering housing market. According to the National Association of Realtors, home sales actually rose last year especially in the third quarter.

The 30-year fixed-rate mortgage averaged at 4.93 percent this week, down from last week’s 4.97 percent average. The 15-year fixed-rate mortgage also dropped from 4.34 percent to 4.33 percent this week. Adjustable rate mortgages followed suit with the 5/1 ARM down to 4.12 percent and the 1-year ARM at 4.33 percent.

For those homeowners still plagued with mortgage debt, Obama announced today a new plan to assist homeowners. A total of $1.5 billion will be dedicated to the cause. It is intended to prevent further foreclosures. Whether this “not” stimulus plan will be a successful remedy to the woes of the economy , or is yet just another duct tape patch, is yet to be seen.

Looks like the Feds might be trying to balance things out – and this could mean an end to some of the lowest home prices and rates in history! There is still time to make the most of these incentives and programs before they disappear – call your Meridian Idaho Realtor Bill Cady today!!


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