As many of you are aware the Federal Reserve raised the discount rate by .25% yesterday. The discount rate is now .75% and marks the first time since June 2006 that the Fed. raised this rate. The media was very quick to point out that this discount rate was not the "short term interest rate" that effects rates such as Prime Rate for credit cards or mortgage rates. Well, is that true?
I am looking at rate sheets for this morning and realizing how wrong the media is on a daily basis. What make us think the banks are going to pay .25% more to borrow money and NOT pass along the cost to the consumer? Either we really have nice, thoughtful banks that would never do anything to get the American people in a mess like this or we are just being fooled again.
Let us not be fooled any longer and try and get the word out that great things are happening in real estate today. We all need to act quickly and get in on the ground floor. Yes, this was a true sign that interest rates will be moving up. I, however, do not believe that is a bad thing. It may serve us all very well. Think about the "fence setters" who have been watching for a sign of better times. Think about that young couple wanting to buy a home but waiting for rates to hit the impossible 3%. Will they move now on a new contract? Will that reluctant investor get off the fence and start buying?
I think these questions are up to us in the real estate business. Will we market successfully against the main stream media and get the positive word out or will we all talk about the good old days and allow this opportunity to pass?
I for one want to take advantage of this market and close many good loans the next few months. All I ask of you is help me market the truth about what is happening in real estate and of course send your customers here for a mortgage quote.
