Interest rates have been on the decline for sometime now. However, according to the Washington Post, the Treasury Department is strongly considering a plan to intervene directly in the mortgage industry to dramatically force down mortgage loan rates to stimulate the housing market. These rates will apply only to the purchase of a home. It will not apply on re-finance transactions. However, it is expected that this move will force the rest of the rates for re-finance down also. Not as much as for a purchase, but still down.
I was talking to a mortgage person the other day and the word is that they are talking down to around the 4.5% range. If this were to happen, the increased demand for housing will start to drive home prices up again.
As I have said before, we will eventually overcome the slowdown and recover. It is just a matter of time.
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