Experts are predicting that interest rates will begin to rise in March of 2010. Why?
The first concern is that our government is having trouble selling Treasury's. This lack of demand will probably force the government to raise the rate of return to attract buyers for our debt. When these costs increase, buyers experience them as an increase in the interest rates. When rates go up, the number of buyers who can afford your home decreases.
According to Mainstreet.com
Next, because the private sector has shied away from buying mortgage backed securities, the FED provides support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt.
In order to promote a smooth transition in markets, the Committee will gradually slow the pace of its purchases of both agency debt and agency mortgage-backed securities and anticipates that these transactions will be executed by the end of the first quarter of 2010.
If the Fed follows through on its promise to close the program down in March 2010, and lean on the private sector to pick up the slack, that could well leave a huge hole in the mortgage-backed securities marketplace. If the economy doesn’t cooperate, and sends private investors into the mortgage marketplace to plug the gap (a good bet right now), then look for interest rates to rise.
The Fed may not do deadlines, but it’s not above firing a warning shot to the American consumer. If you want to buy a home, do it in the next three or four months. After all, the difference in monthly mortgage payments of 5% or 6% can be measured in tens of thousands of dollars over the life of the loan.
Information taken from an article at Mainstreet.com
With all the inventory in the Birkdale, Birkdale Village and Huntersville, NC area, there is a clear indication your buying power might be at it's height now.
Roby Robertson- Ask Me About New NAR ruling and negotiating commissions!
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