Perspective

Rates have jumped up to the mid 5% range due to dramatically increased volatility. “A lot of that has to do with uncertainty about whether the Fed will increase purchases of Treasuries. The market is looking for some change in the Fed’s plan.” according to Thomas Roth, head of US government bond trading. As a home owner or perspective buyer please keep in mind a little perspective amidst the gloomy headlines. Rates are still at a 40 year low. Since 1963, there have been only a hand full years in which the popular 30 year fixed has trended below 6%. These years include 1964, '65, '03, '04' and 05'. http://mortgage-x.com/trends.htm In the first half of this decade when rates were low & loans were being shamelessly allotted to anyone with a faint heartbeat, purchasing seemed the thing to do. As we all know however, home prices were elevated and have since notoriously deflated. Today in 2009, we are in a much different predicament. Rates are not only below 6% but as never before, they have averaged below 5.5 all year. Housing prices are down & in my opinion, very close if not at the bottom. While the Fed may be "stuck in a very difficult place" (Mark McQueen), for the rest of us there has seldom been a better time to buy.