Will the Fed Rate Cuts Mean Lower Mortgate Rates?

March 25, 2008

Every time the Fed cuts interest rates to prop up the US economy, I get asked by friends and clients whether it means mortgage rates will fall, and whether Alan Greenspan and mortgate rates in Westford it’s a good time to refinance.  Well I’m no Alan Greenspan, but I’m married to a guy who understands this stuff and explains it to me.

Mortgage rates don’t follow changes in the Federal Funds rate, because they’re tied to long-term bond rates rather than short-term interest rates.  When the Fed makes a rate cut, the investment community has typically anticipated the cut and factored it into the prices and yields of bonds.

Home equity lines of credit are tied to short-term rates so you will see them follow Fed rate movement more closely.  So now may be good time to finance that home improvement project.

You know that annoying radio ad that says “this is the greatest no-brainer in the history of earth?”  Well, that may be a little bit of an exaggeration, but if you’ve had your mortgate for a few years, and you have good credit, you may be able to get a lower rate if you refinance today.

That’s it for today’s economics lesson, now I just need my stock prices to go up again.

Posted by Susan Ernst | Filed Under Economy, Market, Mortgages | Leave a Comment 

Buyers Are Out There!

March 18, 2008

Guess what? The sky’s not falling in Westford, despite the doom and gloom articles about the local real estate market that you see in the Globe every week.  I had an open house recently, and the buyers were out in force. 

When a home in a family neighborhood gets listed for sale, it usually gets more than 20 groups of buyers attending the first open house.  Many of these buyers are familiar faces of people I saw last year at my open houses. When I commented that they have been looking for awhile, I received a common response.  They’ve seen the homes that were listed in the Fall, passed on them, and have been waiting for new inventory. 

The Spring market came later than usual, it normally starts in January/February.  Not this year, most sellers were waiting for March.  Some new listings have gone very quickly, 1 Loon Way went the 1st day it was listed.  Another in Greystone had multiple offers.   There has also been a flurry of signed offers in the last few days, in all price ranges, mostly on new listings.

So what does this mean to you if you’re a Westford homeowner who reads those Globe articles and worries about losing all the equity you’ve built in your house?  If you’re home is in a decent neighborhood, and in good condition, it is still in demand, and it will hold its value.  In this market, the sellers’ most important decision will be the pricing of their home.  Don’t get greedy, be smart.  Price your home competively and you will get buyers through your property.  They are out there, I have seen them! 

Posted by Susan Ernst | Filed Under Economy, Market, Selling a Home, Westford | Leave a Comment