Living Littleton

Back around the first of the year, Littleton mortgage experts predicted a rise in home loan rates after the end of the first quarter.  This was all predicated on the fact that the Federal Reserve was going to quit buying mortgage securities.  The Fed had been buying billions in mortgages to inject liquidity into the loan market to help stimulate the housing market with the hope of getting many of the sliding markets to stabilize.

Well, the Fed did quit buying and rates did start to move up about a quarter point or so, but the good news is that rates have softened.  In fact, they’ve softened so much that they are as low as they have been this year, so you could say rates have gone in the wrong direction.  This all came about because of the weakness in the Euro due to the debt crisis and bail out for Greece.  Investors have started to worry about the value of the Euro so they have switched to buying dollars.  This influx of money, has caused our rates to stay low for the time being.  More money chasing our bonds which cause the price to get bid up.  With bonds, when prices go up, interest rates go down.

If you felt squeezed out of the home buying market because rates went beyond where you felt comfortable, this present situation may give you another chance.  No one knows how long this will last, but it change and go the opposite direction in a short period of time, so take advantage of it now, if you can.

Jerry Becker
jbeckerhomes@comcast.net