S&P Downgraded the USA a economy to AA+ and Moody is still at AAA+ , what does that mean to you as an investor, buyer and home seller in today’s real estate market. Fannie Mac and Freddic Mac, is 80% owned by the U.S Government after receiving more then $150-billion in federal bailout funds to purchase bundles of mortgages from banks, providing lenders with fresh cash to make new loans. Fannie and Freddie package those mortgages to sell it to investor.
The 30-Year Fixed rate mortgage was down after the downgrade to 4.44% and expect to come to 4.30% . The 10 year treasury note down from to 2.34% from 2.56% on Friday . Auto Loans rate slide lower tied to treasure yields, treasury notes dipped Monday to .45% , pressuring down 48-months auto loan rate. Now the national auto loan according to bankrate.com is 5.6%.
If Investment flows were to move back into stocks and out the bonds, interest rate on treasure securities, and consequentially mortgages would rise. The US has to pay more interest rate So the consumer rate will likely go up.
Over time, we will continue playing out the market and see how the market will regress back to equilibrium. For many different markets this is going to be a short term price increase or stabilization. But just like in the past this will follow with softening of the market prices, especially now that a load of foreclosure inventory is scheduled to come back on the market after a hold of almost a year by most banks. There is prediction that in the coming months we will see a large number of increase in the renter pool verses ‘owner’ occupied. More and more people are looking to dig themselves out of the turmoil by renting; this will only help strengthen as the population of renters increases then the supply of rental properties. Even if the investors purchase some of the foreclosed properties that has displaced owners that have now become renters.
So you ask when is good time to sell, buy and invest. THE TIME NOW FOR EVERONE!