"THERE IS NOTHING WRONG WITH CHANGE, IF IT IS IN THE RIGHT DIRECTION." Winston Churchill. And the housing and mortgage industries experienced a great change in the right direction last week, as the Federal government moved to support Fannie Mae and Freddie Mac, causing Bonds and home loan rates to improve significantly and we now have the 30yr rate at 5.5%!!

Without being told you probably would not know it.  Bank failures, takeovers and diving stocks actually help mortgage interest rates.  Why?  Money is traded as an investment and value is built on confidence.  As the news shakes out, investors believe that their purchase of mortgage backed securities (MBS) will pay off as they have not done in 2 years.  The investor's belief that it would not pay off is what caused Fannie and Freddie's situation as investors were no longer purchasing MBS.  As weaker banks lose and stronger banks grow, the mortgage interest rates look to benefit. 

Overall, the good inflation news and the Fed's decision about Fannie and Freddie should lead to improving Bond prices and home loan rates in the long-term. With home loan rates at such low levels, it's a great time to review your mortgage situation and make sure you have the rate and program that best suits your current financial needs. I'd be glad to do a quick review for you - and your friends, family members, neighbors or coworkers as well.  I look forward to hearing from you!