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“Stock Market Tanks, Interest Rates Fall, Investors Still ‘Locked Out’ of Traditional Money…”
By Sherman Ragland | January 24, 2008
On Tuesday the US stock market suffered its biggest one day decline since following the events of September 11th. Overseas markets had already “TANKED” on Monday, but US Markets were CLOSED in observance of the Martin Luther King, Jr. Holiday.
While most Federal workers had the day off, Senior Members of the Bush Administration and the Federal Reserve were ALL Working On Monday to come up with a solution to ENSURE that the US Stock Market did not go into MELTDOWN. The Secret Plan agreed to by Fed Chairman Ben Bernanke and Treasury Secretary Paulson was an Immediate EMERGENCY Rate Cut of 75% or 75 basis points as it is known within Financial Circles. But for the EMERGENCY Interest Rate Cut, many, including Market Maven Jim Cramer, believe the US Stock Market would have dropped by “as much as 1,000 points on Tuesday”.
The Cut in US Interest Rates had an immedite impact by causing US mortgage rates (tied to adjustable rate mortgages) to follow other interest rates lower this week. As of this post, the average 30-year fixed rate mortgage now at the lowest level in almost four years. Specifically, Freddie Mac’s weekly report says 30-year fixed rate mortgages averaged 5.48 percent this week, down from 5.69 percent last week. It is the fourth consecutive week mortgage rates have been in a decline, but the steepest decline in several weeks. As a note, this is the lowest level for 30-year fixed rate mortgages since March 25, 2004, when the average was 5.4 percent.
According to Freddie Mac chief economist Frank Northaft, “When the Federal Reserve cut the target federal funds rate by three quarters of a percentage point, the action was extraordinary in both the magnitude and the timing of the rate cut: It is the largest cut since October 1984, and also the first time in more than six years that the Fed took such action outside of a scheduled Federal Open Market Committee meeting “As a result, mortgage rates continued trending down for the fourth consecutive week across loan products.”
Unfortunately, many homeowners as well as NOVICE Real Estate Investors are UNABLE to take FULL ADVANTAGE of Declining Mortgage Rates. In a separate report Thursday from the National Association of Realtors, housing prices and housing sales continued to decline. Sales of existing homes in December fell 2.2 percent. In all of 2007, sales fell 13 percent. Existing single-family home prices in 2007 fell 1.8 percent, the first annual decline in four decades.
Bottom Line: Most lenders have completely revamped their loan programs and many homeowners as well as “WANNA BE” real estate investors are having to sit out what is becoming the Single Best “BUYERS MARKET” in 12-15 years.
DC-REIA.COM and The Realinvestors Academy are sponsoring a 4-week program on “HOW TO GET THE MONEY” to take advantage of the single best Buyers Market in 12-15 years and get in before housing prices start heading back up: “Way Way Up!”
For more information on this class, go to: http://www.RealinvestorsAcademy.com
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Tags: 30 year fixed rate mortgages, adjustable rate mortgages, chief economist, fixed rate mortgage, fixed rate mortgages, get the money, market maven, martin luther king, martin luther king jr, sherman ragland, treasury secretary
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