Why Waiting is Worrisome

Nobody possesses the magical ability to predict exactly what the dynamics of the housing and interest rate markets will do in the near term or beyond. It's more compelling to listen to the words of those who've studied and continue to study the trends, history and market indicators, rather than those who simply report on it. Below are a couple of excerpts from Larry Baer, an expert in the mortgage industry:

1. The media publish reports suggesting the government is positioned to push interest rates down into the 4.0% to 4.5% range. The source of all these stories is quoted as "anonymous" because, by the authors' own admissions, these sources have not been authorized to make such comments. It seems that the national media and their sources are more than willing to forego credibility in favor of sensationalism.

2. It's a tragic journalistic malfeasance for unnamed and unauthorized sources to build expectations among the public for outcomes that could be very distant if not completely unrealistic. The immediate result of these "rumors" could cause huge numbers of buyers to miss out on the home purchasing and financing opportunities of a lifetime, while simultaneously delaying any meaningful recovery in the housing market by months or longer.

Market dynamics - not government intervention - dictate what the rates will do. While governmental actions can have an effect, they cannot set the interest rate levels in a free and open market place. It could be the case that rates will dip lower. But it could also be the case that they will rise. Chances are good that, in the future, with the unprecedented sums of money being printed to keep up with the government's "stimulus" that inflation will finally come back and cause rates to rise. If we'd asked you 6 months ago if you'd be happy with a 5.000% mortgage, you would no doubt have been thrilled. Hopefully, we can impress upon prospective buyers the great opportunity that's here - right now - rather than waiting for something that may never arrive. -L&M