Remember how we got to where we are. If the Fed stops buying loans, rates will skyrocket and home values will plummet, and you will be stuck with a house you can’t pay for or sell. 16% of Californians aren’t making their payments, so there will be plenty more chances to buy.
Sounds like a sells gimmick; most people get attached to a house and lose their heads. As I said, remember how we got here.[/quote]
Wasn’t there something in the news recently that the Fed’s actions had the effect of lowering mortgage rates by a third of a point? Not exactly a steep plunge.[/quote]
The news I saw was ~0.5 of a point over treasuries. But remember the FED is also buying treasuries driving that down too. IF the fed ever stops, I can easily see rates going up 0.75-1%. That would put average rates somewhere right around 5.75-6%, and that will cost the average monthly payment about 10% more in interest. I guess you need to define what a ‘steep plunge’ is to you.
