“What Affect is Fed Easing Having on Rates?”

“What Affect is Fed Easing Having on Rates?”

For now no affect. All those that have predicted doom and gloom once the Fed diminished their appetite for buying bonds, guess what, they were wrong.

Many of us have been calling for less Government involvement in the mortgage business. So what is really going on? It is really very simple, there is less demand for mortgages and mortgage volume has dropped to the lowest level in years. Less demand naturally means less need for the Fed to buy bonds.

I’ll let you in on a secret, if restrictive underwriting on mortgages continue, there will be continued lower levels of mortgage volume. Once that happens, less folks will qualify for mortgages and less homes will get sold.

Home ownership is currently at the lowest level in nearly 20 years and lower interest rates won’t be enough to turn the real estate and mortgage market around.