Friday, October 30, 2009

Historic Rates Why Now is the time to Act

Below is a chart of rates over roughly a 1 year timeframe.  There are couple things to take away from this chart and how to use it to encourage prospective buyers to get off the fence.  If you look at the far left side of the graph you will see where 30 year fixed rates (blue line) were sitting in November (6.25%).  From that point through the middle of January, rates dropped to what was at the time an all-time low.  This drop coincided with the Fed announcing they would purchase mortgage backed securities.  From that point through May rates set the all-time low and have bounced around since.  How can you use this with your buyers?  First, rates now sit at the same level they did last year in November...near an all-time low.  They moved around during the summer but were still very good.  Secondly, the Fed announced they would end their mortgage backed securities purchases at the end of the first quarter, 2010.  If the announcement and implementation of the program dropped rates in the manner it did it would be safe to assume the discontinuance of the program could have an opposite effect.  Let's hope this change isn't as dramatic but this illustrates why between now and March will be the time to buy a house.   

 

 

David (Drew) Wright

Vice President Mortgage Loan Officer

Bank of America

PO Box 597/4804 N Croatan Hwy

Kitty Hawk, NC 27949

800.831.6692 Toll Free

252.261.6900 Local

252.256.2018 Cell

252.261.6899 Fax

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