The economy is still struggling to gain its footing, prompting several Federal Reserve officials to push for a new stimulus campaign, which could include a move that would push mortgage rates even lower.
The Fed will discuss such moves at its policy-making committee meeting next week.
Fed Chairman Ben S. Bernanke indicated to Congress last week that one of the items under consideration would be to further drive down long-term interest rates, which could pull mortgage rates down even more from their already-record lows.
Some analysts have argued, however, that lower rates haven’t provided a broad boost to the economy because many consumers still are unable to qualify for loans due to banks constricting their lending standards.
Could 30-Year Rates Sink to 3%?
Mortgage interest rates have been on a record-breaking streak the last few weeks, and some even predict the 30-year fixed-rate mortgage, which is the most popular option for home buyers, could drop as low as 3 percent in the coming weeks, according to CNBC news reports.
“If the 30-year fixed were to drop to 3 percent, that would open up yet another wave of refis, perhaps more than the industry can handle,” mortgage lender Craig Strent of Apex Home Loans in Rockville, Md., told CNBC. “Certainly a 3 percent 30-year fixed would make home buying more affordable for some people that may not qualify at 3.5 percent, but if people are not entering the market at 3.5 percent, which is already insanely low, then they may not enter at 3 percent, as they may simply prefer to rent or may not have the down payment needed to buy.”
Economy Still Lags
While the housing market has shown signs of picking up recently, the economy continues to lag in its recovery, despite showing promising signs earlier this year of growth. The unemployment rate, in particular, has been a troubling sign, according to the Fed. The unemployment rate dropped to 8.1 percent, falling a full percentage point between September and April and showing little progress recently. The Fed has indicated in the past that it would take more steps to try to boost the economy if the unemployment rate did not improve.
“We are very committed to ensuring, or at least doing all we can to ensure, that we continue to make progress on unemployment,” Bernanke told Congress last week.
The author of this article is: realtormag.realtor.org
See the original post at: http://realtormag.realtor.org/daily-news/2012/07/25/new-fed-stimulus-could-send-loan-rates-lower
At GayRealEstate.com, we keep you updated with all the gay realtor, lesbian realtor, gay realty, gay real estate and general real estate news affecting the LGBT community coast to coast, and in your neighborhood.
Click here for list of gay realtors, lesbian realtors and gay friendly realtors Nationwide.
If you have a real estate story that you’d like to share with us with the gay and lesbian real estate community, please contact us at: manager@gayrealestate.com
