Home Buyers: Lock in these Low Mortgage Rates Now

vurocolley 7 jaar geleden bijgewerkt door Kevian 7 jaar geleden 1
Mortgage rates are at an all-time low. Recent data released by Freddie Mac from 1972 through February 2013 illustrate just what historic times home buyers currently live in.

With the Federal Reserve purchasing $45 billion worth of longer-term Treasuries and $40 billion in mortgage-backed securities—for a total of $85 billion each month—30-year fixed rates have been driven down below 4.0% for the first time ever.

When large institutions buy large quantities of bonds—say $85 billion per month—bond prices are bid higher, which drives bond rates down (bond prices and rates are inversely related). And this is exactly what the Fed intends to do—push mortgage rates down to give relief to home buyers and make it possible to finance their next home.

This maneuver by the U.S. central bank is known as quantitative easing (QE) and is unprecedented in its scale. How much longer the Fed will make these monthly purchases is unknown. What is known, however, is that the Fed cannot continue this program indefinitely. Meaning at some point, these purchases will end and rates will normalize.

When will rates increase? How high will they go? How fast will they move? Nobody can predict exactly what rates will look like going forward.

But if you lock in a fixed rate today, you won’t have to worry where rates go tomorrow.

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Nowadays, buyers rarely thinks of buying a house, which is owned by banks. There is always a possibility that buyers would go for a bigger size house, which can fit under there budget. Though the mortgage rates are low but in this new year they can increase. To read more information regarding real estate visit my site.