I am listening to CNBC and they are talking about how great it is that interest rates are so low. Of course, they then bring in the negative and comment, "Rates may be low, but who has 25% to put down and a credit score of 750"?
Where do they get this information. We are getting buyers into homes everyday with only THREE percent down and FICO's as low as 580!
Please do not believe everything you hear or read and always remember, "The mass is always wrong" If you follow the mass, you will always be average at best. Most successful people have learned to buy and sell against the grain.
If I can ever help you buy or sell in Newport Beach CA, Newport Coast CA, Irvine CA, Costa Mesa CA, please give me a call!
Dan Rawitch
888-794-9882
www.eHomePlaceRealty.com
www.LoveNewportLiving.com
www.LoveIrvineLiving.com
www.LoveCostaMesaLiving.com
www.MileStoneMtg.com
I am listening to CNBC and they are talking about how great it is that interest rates are so low. Of course, they then bring in the negative and comment, "Rates may be low, but who has 25% to put down and a credit score of 750"?
Where do they get this information. We are getting buyers into homes everyday with only THREE percent down and FICO's as low as 580!
Please do not believe everything you hear or read and always remember, "The mass is always wrong" If you follow the mass, you will always be average at best. Most successful people have learned to buy and sell against the grain.
If I can ever help you buy or sell in Newport Beach CA, Newport Coast CA, Irvine CA, Costa Mesa CA, please give me a call!
Dan Rawitch
888-794-9882
www.eHomePlaceRealty.com
www.LoveNewportLiving.com
www.LoveIrvineLiving.com
www.LoveCostaMesaLiving.com
www.MileStoneMtg.com
Well, we are now officially in uncharted waters! Not only did the Fed lower the Fed Funds rate to just about ZERO, but the 10 year bond which historically lead mortgage rates, also dropped throught the floor.
The below chart really tells the story, it is a chart that goes back to 1962. As you can see, rates have now dropped significantly lower than they were when my Dad bought his first home. This is amazing.
As I posted yesterday, when fear subsides in the financial markets, the spread between the 10 year bond and mortgage rates will narrow. We may actually see 30 fixed rate loans in the high three to low four percent range.
Yesterday, someone commented on my blog with a comment that read, "Beware of Realtors that tell you now is the time to buy".
This was unfair in my opinion! I am not supporting the Feds position, nor am I suggesting we will not pay for these low rates in other painful ways in years to come. It could be via inflation, increased deficit or further devaluing of the dollar. My point is to say that rates have never been this low and I am not sure how much lower they will go. Yes low rates can create inflation, which again is a good reason to own real estate.
I cannot or will not predict when at what pace the housing market will turn but I can tell you, my 25 year old daughter and all her first time home buying friends are getting VERY excited.
Please let me know if you have any questions on the graph. I would also be happy to answer any questions you may have regarding purchasing Real Estate in Newport Beach, CA, Newport Coast, CA, Costa Mesa, CA or Irvine CA.
Please visit one of my sites for more info
Take Care,
Dan Rawitch
888-794-9882
The current interest rate enviroment is providing incredible opportunities for homebuyers in Newport Beach California and all other markets! At the time of this writing, it is possible to get a 30 year fixed rate mortgage in the high 4% range. WOW! How would have thought?
Now we have analysts saying that it cannot go much lower. I do not agree. Currently the 10 year treasury bond is at a rate of approximately 2.50%. Historically, mortgage rates have been 1-1.5% above the 10 year treasury bond. Imagine what rates will look like when the spread between the ten year bond and mortgage rates narrows to traditional levels. Let's look at the math:
2.50% Ten Year Bond
1.25% Spread
_______________
3.75% 30 year fixed rate loans.
Combine this fact with the feds likely move to lower Fed Funds and/or the Fed Discount rate this week and we could see the 10 year bond fall even lower. My guess is that the 10 year bond will not immediately fall and the fed cannot really push the short term rates much lower (ZERO is the lowest we can go). However, the can start aggressively buying it's out bonds and force the ten year rates even lower.
The only way out of this economic crisis is to jump start the housing market. I think 3.50-4.50% 30 YEAR fixed rate loans will do the trick. Combine this with less foreclosures, which will lower supply and we could see insanely high buyer demand!
If you are even thinking about buying or selling, I would suggest getting off the sidelines and start taking some action fast!
The FED is putting the peddle to the metal, right now, the car is not getting traction and the wheels are squealing on the pavement. Soon, the pavement will dry and the wheels will get traction. The car will accelerate faster than ANYONE is anticipating!
Remember, the Mass is always wrong and currently the mass is predicting gloom and doom through 2009...I don't buy it and I hope you won't either.
As a former bond trader and lifetime Real Estate and Mortgage Executive, I have seen many of these cycles come and go. Don't let this one fool you!
For more information on Buying Real Estate In Newport Beach California or any surrounding areas, please visit www.LoveNewportLiving.com. I hope to see you there!
Dan Rawitch
888-794-9882
There are countless reasons why I love Living in Newport Beach! Just to name a few:
Please enjoy this 50 second Video and you will see how beautiful it is here!
Real Estate Broker dedicated to serving clients in Newport Beach, Newport Coast, Corona Del Mar and Irvine
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