Remember When?
by Osman Parvez
I was digging through old blog posts this week and came across a little gem.
From Fed Takes a Breather:
For the first time in two years, the Federal Reserve took a break by not raising interest rates. From what I’ve read, investors aren’t sure whether this will be a long pause or a short one. For now, the discount rate (a key benchmark for all interest rates) will stay at 5.25%, a welcome relief for many borrowers.
What does this mean for housing? Mortgage rates nationwide have recently begun trending lower so the Fed decision today could help ease the landing for housing in many parts of the country. Many borrowers who took out adjustable rate mortages (ARMs) might not be pinched quite so badly, though no doubt they’ll notice the difference when low initial rates reset to benchmark levels.
Talk about entering a way back machine. Today, the Fed Funds rate is effectively ZERO and it’s been stuck there since about 2009.
As a benchmark for interest rates, the Fed Funds rate (and discount rate) a the foundation for essentially all bank lending in the Untied States – including, of course, mortgage rates. I like to think of it as a gas pedal for economic activity and we’ve been pedal to the metal for a long time.
Given last week’s surprising market volatility and drop in mortgage rates, it looks like we’re not letting up the gas anytime soon.
Here’s a long term mortgage rate chart for comparison…
For buyers and sellers, the number one question is whether rates will continue to fall. As I’ve said many times, nobody has a crystal ball. When I wrote Fed Takes a Breather in August 2006, I thought the drop would be relatively short lived. Instead, we’ve had 8 years of dropping or flat rates.
Something to think about.
—
As always, your referrals are deeply appreciated.
Welcome to House Einstein
Locations, Due Diligence, Negotiation
Testimonials
Osman was a refreshingly honest realtor. He stressed through the entire process that his goal was to make me happy with my home purchase. I greatly appreciated the fact that he never shied away from pointing out the negatives as well as the pluses of different places while leaving the final decision up to me.
We can highly recommend Sophie. Her attention to detail and communication skills are great. Our home was in area that most realtors are not familiar with, but Sophie took extra time to get to know the neighborhood in order to give us quality service. She also brought in a professional photographer to make our home look its best. Even though the listing was in winter, the house sold quickly. With Sophie’s business and people skills, we have no doubt she will be a top realtor in the area.
Related Posts
Share This Listing!
More about the author
Osman Parvez
Owner & Broker at House Einstein as well as primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has appeared in the Wall Street Journal and Daily Camera.
Osman is the primary author of the House Einstein blog with over 1,200 published articles about Boulder real estate. His work has also appeared in many other blogs about Boulder as well as mainstream newspapers, including the Wall Street Journal and Daily Camera. Learn more about Osman.
Work with
House Einstein
Thinking about buying or selling and want professional advice?
Call us at 303.746.6896
Your referrals are deeply appreciated.
