54 year-old females making about $36,000 might be on vacation starting on International May Day. Now, don’t get too excited if you are a member of the Communist party or a 22 year old dude that goes crazy for Cougars. Having said that, I wonder if there are Communist Cougars?
Sounds more like a new soccer team from East Asia that’s playing in the Wold Cup. Your travel agents this time around are Ben Bernanke and Tim Geithner.
With the Fed announcing that they will stop buying mortgages and the end of the tax credit all coming soon, the speculation about what will happen to the residential real estate business is all over the map.
Listen to my video, made from my MacPro in my office on Friday March 5th. Let’s see late spring if I was right!
Realty Reality! That describes Fred, a sharp witted and outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR's Marketplace along with being quoted in the New York Times, The Wall Street Journal and other media outlets. Fred is the CEO of U S Spaces, Inc/Arrivva (a real estate brokerage firm in PA, NJ, DE and CA) and U S Loans Mortgage Inc (mortgage brokerage in PA, CA, FL and VA), and serves on the Board of Directors and is the Federal Legislative Director for the UpFront Mortgage Brokers. Fred is also the co-creator of real estate startup Rentscoper.com, a mathematically driven rental search engine. See everything Fred at fredglick.com.
Ken Montville
March 7, 2010 at 1:59 pm
No vacation for me, Fred.
Yeah. It’s time to let the tax credit expire for good if for no other reason than that home buyers will begin to believe it will never expire and it becomes and entitlement. I hope your optimism about the mortgage interest rates is well placed. I think you may be seeing an anomaly, through. You would know better than I.
Here’s my prediction: Interest rates at 6% to 6.5% by the end of the year. Home prices fall by another 10%, on average, leading to increased panic short selling and foreclosures. Sellers with decreased equity will stay put crimping the ability for buyers to enter the housing market.
Banks and GSEs will hold onto their money until Congress cries “Uncle” and let’s them run the world their way, again.
Ross Therrien, Prudential Verani
March 7, 2010 at 4:40 pm
I guess we’ll have to wait a see. I agree with letting the tax credit expire but perhaps have another program immediately accessible to aid in the purchase. A thought.
Bruce Lemieux
March 8, 2010 at 8:05 am
All of your points make sense to me, although I don’t think that 95% LTV loans are such a great idea for the long-term health of the housing market. IMO.
I’ve been really surprised at how many of my buyers and other agents are aware that the Fed will stop buying mortgage-backed securities. And, like Ken’s comment reflect, I hear a lot of pessimism about the potential of much higher rates later this year.
But I think you’re right that we shouldn’t be so worried about higher rates. If the market was worried, wouldn’t we see higher rates now in anticipation? I think the Fed is really doing a superb job with monetary policy. If inflation starts to rise, then we’ll see mortgage rates start to creep up. But for inflation to go up, employment has to go up. And, if people have jobs and want homes, won’t they enter the housing market even if rates are a bit higher?
Great post. Maybe I’ve been spending too much time under powerlines lately, but I gotta say you make compelling points here. 😉