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Current Low Mortgage Rates - Calls for Home Buying

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By : Vicki Hat    99 or more times read
With the current economic condition, the kind of spending that you might think the very least is home buying. Many people are scared to venture on this kind of investment because of the fact that home values are low and lenders are credit crunching.

However, some experts say otherwise. For them, home buying is best made at this time. For what reason? Well, it is all about the interest rates.

Current Interest Rates Makes Home Buying Affordable

For the past month, interest rates are really low. When it is kept low, spending on housing also becomes cheaper. Hence, it just makes sense if people take advantage of this situation because it would not remain that way forever.

There are so many factors that affect the rising and falling of interest rates. Normally, interest rates are high when the economy is good and when there is high demand for credit. But since the economy is down, the Federal Reserve has manipulated the interest rates to make borrowing more affordable for the people. They have bought back mortgage backed securities or the government has even sold their debts to foreign investors. These then helps lower the interest rates.

Buy a Home Now because of Uncertainties in Interest Rates

Even if the government manipulates the interest rates to keep it low, it may not last forever. One has to bear in mind that the government has already been in debt or has been overspending to help the economy recover. The budget used to implement such activity is almost consumed.
But one of the reasons is economy. It has been crawling slowly to recovery. And even if there is no assurance that it will stabilize any time soon, the interest rates can change because of other factors.

According to experts, there are two reasons why the interest rates are low. One was caused by the Federal Reserve (which has been explained above). The other reason was because of China's love for the currency, which moved them to purchase Treasury Bonds. According to some sources, China has expressed their plan to cut back on buying back treasuries because of the fact that there exist a shortening of the trade deficit.

So anytime, the interest rates could rise causing to increase the demand for the Treasury Bonds. This can only be one of the best solutions that the Feds could take. Although, you really do not have to get into the nitty-gritty of the economics used to explain such possibility but the current trend and the various economic activities point out towards the increase of interest rates.

Therefore, if you plan to buy a home right now and if you have the budget on hand, you might as well take advantage of the low rates. This is because tomorrow, it may start to rise soon. Expert says it would even rise above 5 percent towards the end of the year. Hence, this makes home buying expensive until such time the government would find a remedy to keep it low without having to incur additional debts to manipulate its trend.
Find more homes for sale or for rent when you visit Desert Hills AZ Homes, 3 Bedroom Homes in Desert Hills AZ and Foreclosed Houses for Sale in Desert Hills AZ.

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