Time To Buy Real Estate

Fed is ending its 16month program of buying Mortgage-Backed-Securities (MBS). They have been buying these MBS’s for a while now thus causing the lower rates that we have come to love and expect.

Rates will have to go up to make the investment more attractive to the fewer major buyers that remain in the market.  Before the Fed stepped in, rates averaged 5.75% to 6.25% for much of 2008. So it is likely that we should see rates rise to that level again.  More than likely, we’ll see the market move back towards those levels.  My best professional opinion says by the end of this year for sure and probably by the summer.   I can’t stress enough … the historic lows are over … if you need to refi or do a purchase … now is your best time.

If you paid attention last week, you would know that MBS pricing collapsed on Wednesday & Thursday, which has already led to rate increases on many programs.  Investors are nervous about the Fed backing off, and the cost of the new health care bill signed into law today.   Remember, rates always rise like a rocket (fast) and fall like a feather (slow).  Won’t take too much to push them upwards – very fragile market.

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5. Purchasing ‘Fixer-Uppers’ or ‘Foreclosed’ Homes