Salutations! In my never ending quest for knowledge I have been perusing the articles and recent news stories regarding the current debacle over interest rates, housing prices, and inflation. Of course there are many different concepts and rationales from as many experts in their fields. I certainly wouldn’t want to be Ben Bernanke at this moment in history. His task is a daunting one indeed. I haven’t seen a political style cartoon yet of him juggling the many parts of the economy. I can imagine it though and don’t envy him one bit for his perilous position. He is charged with dealing with the problematic housing market, the increasing inflation, a stock market which seems fickle at best, fluctuating unemployment figures and pressure from every quadrant to “just fix it.” Often though what’s good for the goose is not necessarily good for the gander when it comes to the economy. To improve one segment of the economy might well cause another to be put in peril.
Gentle Ben has lowered the interest rate by one and one-quarter points since the beginning of the year in an attempt to bolster our economic condition. I was hoping to see more of a reduction in the fixed interest rates offered by lenders but that one and one-quarter points did not transfer directly to their bottom line, at least in the products offered to borrowers. Perhaps in the spring when speculation says Bernanke will lower rates by at least another quarter of a point, we will begin to see some real deals from banks and mortgage brokers. I will say that recently one broker offered me a five year ARM in the four and a half percent range which is pretty tempting. Truthfully I believe we are all spoiled from years of great rates and easy lenders. Things may be a little bit tighter right now but borrowing is still easy if you have decent credit. Interest rates are still at a twenty year low. For anyone who can hearken back to days of yesteryear, circa 1982, you might recall seeing interest rates which exceeded twenty percent and then settled in at around sixteen percent. Comparatively we are sitting pretty in today’s economic situation.
So what will happen next with the Fed? How will that affect prices? What about inflation if interest rates are further reduced? Well, I think I will go along with the experts I watched on msn.com today. The panel of three agreed that interest rates need to continue to be lowered to further stimulate business and stay away from the specter of recession. They believe that if inflation occurs we can better deal with it from a healthy and robust position rather than one which is sluggish. As those rates are lowered the opportunity to purchase your dream home, investment property, or getaway retreat may reach the affordability range. In that case please keep us here at Prudential Mike West Real Estate in mind. We can handle the details for you and make your transaction a simple and clean experience. We have some amazing homes and properties to consider, a truly fine selection. Check out some of the listings on our web sight at www.prudentialmikewest.com, and see for yourself. Or, www.leavenworthleavenworth.com
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