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Bill Freehling is a business writer for The Free Lance-Star and Fredericksburg.com. This blog is on Fredericksburg-area business. Send an e-mail to Bill Freehling.

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March 26th, 2009, 1:35 pm

Mortgage rates dropping

I went to the interesting first meeting of the Fredericksburg Real Estate Investors Association last night. There were close to 50 people there, far surpassing the organizers’ hopes. Goes to show that there are plenty of people out there who think there are some nice deals out there in the housing market.

On that note, CNBC is reporting today that 30-year mortgage rates are now at their lowest point since at least 1971. That’s leading to a wave of refinancings, which should help stem the tide of foreclosures.

See tomorrow’s FLS Business section for a recap of last night’s meeting.

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Permalink: http://news.fredericksburg.com/businessbrowser/2009/03/26/mortgage-rates-dropping/

  • lgross

    under water?

    you know what’s funny about this….

    you’d think the banks themselves would want to
    snap up the bargains… but instead.. we have a
    bunch of investor wannabes band together .. to
    do… what the hey… what a bank would do….

    or perhaps I’ wrong…. educate me.

  • freehling

    It’s a good point. A significant percentage of homeowners are unable to take advantage of the lower mortgage rates because they have no equity in their homes. Obama said the other night that about 40 percent of homeowners with a mortgage do qualify, however, and recent changes are supposed to enable more people to qualify. So it certainly doesn’t eliminate the problem of foreclosures, but it should prevent some foreclosures, which helps the entire market. Most banks don’t want to hold long-term mortgages on their books — they’d rather sell them off to Fannie Mae and Freddie Mac. Inflation can present a real problem to the owner of a long-term mortgage loan, as the monthly payments coming in in 20 years may not be worth nearly what they are today. But inflation is the friend of the mortgage borrower.

  • lgross

    inflation over 20 years….BOTH money AND the
    value of the home.

    If you can sell the home for more than the
    amount of inflation you come out ahead – right?

    that would assume that housing prices .. would
    recover.. and would start to accelerate in value –
    faster than inflation.

    for many years.. that was the case – saving up
    for a house was a horse race… between the price
    of the house and how fast you could put money
    aside.

    It got so bad that it was better to take a hit on
    the financing for a lower down payment than to
    save up because by the time you save up
    enough for the home… it had gone up in price
    more than what you could save up.

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