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I just heard the Federal Reserve went ahead with the more aggresive approach, and dropped rates by .5%. What does this mean in the long run? How long does it take to affect mortgage rates. I know it is not a direct relation, but historically, they parallel somewhat. Where do people think we will be sitting at in 6 months?
the fed funds rate affect prime rates....it will probably take a few weeks before the PRIME RATE of 8.25% will go down to 7.75%.
but
the good news affected the stock market...and the market shot up 285 POINTS!!! that means higher mortgage rates....less investment in the bonds. lower bond yields
Not necessarily. Mortgage rates went down when the fed lowered rates 4 years ago .. Honestly, we're in wild west now as far as historical trends, so no one knows (with any degree of precision) what's going to happen.
If you locked a rate you're happy with - that's what matters. I expect to lock within the next two weeks, and I am not worried that rates will soar in that period of time. What they do in the next 6 months to a year is pretty much a crap shoot.
Prime rate went down when the fed lowered it.....the 1st mortgage rates were already low. The housing boom happened because the borrowers who didnt have any money down were borrowing 2nd mortgages at EXTREMELY low rates.
It was like 4.25% for 1st mortgages, and 5.25% for 2nds.
If the the first mortgage was 4.25% and the 2nd at 8.25% it would be hard to take advantage of this.
Quote:
Originally Posted by Briolat21
Not necessarily. Mortgage rates went down when the fed lowered rates 4 years ago .. Honestly, we're in wild west now as far as historical trends, so no one knows (with any degree of precision) what's going to happen.
If you locked a rate you're happy with - that's what matters. I expect to lock within the next two weeks, and I am not worried that rates will soar in that period of time. What they do in the next 6 months to a year is pretty much a crap shoot.
if you read the other threads...you will see my posts.
This is depressing, at least for a prospective homebuyer such as myself.
The people over at centex, where we are eyeing some homes, seemed to
think it would help rates. Checking later today with them. We shall see.!
If rates go up, that just sucks. Wont be able to buy. Booo
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Yes,
