MORTGAGE RATES - MY THOUGHTS

03.19.09

It is my opinion that current mortgage rates, while certainly good, are not great as far as really stimulating the real estate economy. Most rate sheets seem to have the rates falling between 5 & 6%, depending on the plan offered, with 0 - 1 points, at conforming levels.

Anyone with a decent memory can remember similar, or better rates, only a few years ago when there was no economic "crisis" as we see it today. One would think that the rates should be at least 1% lower for similar plans today, but it would seem that the banks, being the cause of much or our problem, are not particularly eager to give money away at stimulating rates.

Of course there are other reasons perhaps, none arguably good in my opinion, to this resistance to lowering rates further, but it would seem that a real market stimulus could occur if rates were in the 4% to sub 5% level or lower.

The truth is that rates will be poised to climb, sharply perhaps, once things turnaround. So will inflation probably as, in many industries, inventories are not being replenished and if demand outstrips supplies, prices will climb; this would of course be great for real estate investments-purchases, as well as existing property owners who are waiting for this "miracle" to begin! "When" is what we are all watching, and waiting, for!

©2009 R. Leech features.