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I do know that the correct phrasing
for yesterday's rate cuts is "50 basis points" but let's face it,
all us lay people are thinking about it as half a percentage
point!
Whatever you want to call it, it's
good news for buyers and sellers!
Let me explain that this is NOT a
half percentage point cut in mortgage interest rates. While the Fed
rate does impact mortgage interest rates it's not a direct one to
one correlation. And, some of the Fed rate cut has been gradually
factored in already.
That said, this will put downwards
pressure on mortgage interest rates. Today's release of CPI numbers
showing almost no inflationary pressure will help that as
well.
So...now what do you do? If you're a
potential buyer it's a great time to think about buying a house.
You probably qualify for a little more than you did a week or two
ago. There are unlikely to be much in the way of additional rate
cuts in my opinion. If you're even semi serious it's time to talk
to a mortgage lender and find out what you can afford to buy. Then
go looking! But read my advice to sellers as well!
Sellers, good news at last!
But...don't blow this! This is not the time to raise your price. In
fact, I'd argue just the opposite is true. You're likely to get a
brief uptick in buyers. Lower the price now and get the place sold.
This new, small surge of buyers isn't likely to last long and the
spring market is a very long time away! I believe pricing pressure
will continue to push home prices down. The bulk of foreclosures
haven't begun to hit the market here locally yet. And, as always,
make sure your home is in tip top showing condition and is easy to
show! Always!
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