Mortgage Rates are Falling!!! Yeaaah

Mortgage rates fell for the second week in a row to 6% for FHA and is at 6 and an eighth for VA. The FHA believes the rate cut is related to the lack of applications in the first two weeks of the month. This is the only way to stimulate this market as many buyers sit on the fence afraid to pull the trigger even if the prices are going down in upcoming monthes. Many buyers were very nervous in contract over the last few weeks waiting to lock their loans with rates at 7%, but now all these buyers are happy to take 6% and lock in. As a Realtor I feel that this market could head into the dumps if we don't keep mortgage rates affordable for Americans. This sign of lower rates must continue into the new year to ensure that buyers will take advantage of all these foreclosures and get them out of neighborhoods. This will keep sales flowing and encourage the real estate market to slowly move towards appeciation.

I am positive that the market will correct itself and the economy will become healthy, but it is imperative that interest rates are competitive with what Americans believe are good rates. Now that the public believes what is an exceptable rate to buy a home we can not go back to higher rates until the market is healthy again. Low rates plus great properties equal sold homes. Ian Stone