I have a client telling me that the Fed is working against home sales by artificially holding interest rates down. That people feel like they have at least two more years to watch housing, at least until mid-2013, which is the current apparent horizon of low interest rate projections from the Fed.
He says (actually, it was his very intelligent wife whom he quoted with full admiration and attribution), “Why feel urgency to borrow now, when we are clearly told that rates are going nowhere, and prices are feeble.”
Hard to argue with. So, the Fed has drained urgency out of the housing market; the National Association of REALTORS® and REALTOR® members support that effort, and then in a disconnect, they work themselves into a lather with educational sessions and programs and seminars to learn how to “Create Buyer Urgency!” Well, I have been hearing for 5 years that rates are going to go up. And the Fed tells me I will likely hear it for a couple more years, as we witness ongoing record low mortgage rates.
And I am supposed to look like a goon and twist arms to “Create Buyer Urgency” because rates will go up?
Nope. Not me. If you are ready to buy a house, give me a call. If not, think your way through it, and I will be around when you ARE ready. No pressure. No hassle.
Maybe instead of another silly 1st time buyers boondoggle, the Fed should just give us a road map plotting how and when rates will escalate. It just might shake some money loose and get it into circulation.
“The FOMC left its benchmark interest rate in a range of zero to 0.25 percent, where it’s been since December 2008 and reiterated language from its August meeting that the rate is likely to stay very low through at least mid-2013.”
From Bloomberg By Scott Lanman and Craig Torres – Oct 13, 2011 12:00 AM ET