Declining Mortgage Rates

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by bighorse     💰tip   follow   2011 Oct 24, 5:24am  

There are lots of people who seem to be able to afford homes now. But they are not doing so because of an expectation of declining prices.

The Fed has recently gave everyone an expectation of declining mortgage rates. I don't see why anyone would be rushing in to get a mortgage. They will all sit at the sidelines and anticipate rate decreases.

Isn't that counter productive? I expect the next mortgage report to come out with data showing even more decrease in mortgage applications.

Shouldn't they "stabilize" interest rates as they are with home prices?


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18   you pay for my stuff   2011 Oct 25, 1:26pm  

Of course prices won't drop from an increased interest rate.

It just means people will have to save up 4x as hard for down payment after the Fed wakes up one morning and decides to not help mortgages anymore.

Interest rates are lower than they should be because it's on crack. Remove the crack and see what happens. Your opinion on rising interest rates not being correlated with home prices is true if we weren't on the crack. But we are.

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