Michael Tacconi

2009 Mortgage Interest Rate Predictions!

We currently have the lowest mortgage rates in recorded U.S. history.  Is it time for Buyers to take action?  YES!  Jim Walberg’s conversation with Michael Tacconi.

Two days ago I sat down with one of the key loan officers in the East Bay, Michael Taconni, and had a discussion about what is happening with interest rates in 2009 and when should Buyers take action.  It was a very interesting discussion.  Here were three of the questions I presented to Michael to address.

When should home Buyers consider buying a home in 2009?  Michael’s immediate answer was NOW!  He said that Buyers have never had better home mortgage rates (YouTube)  to chose from than right now – April 2009!  Never in all the years of recording mortgage interest rates have they been so low.  The mortgage options available are all in this same category – from five year and seven year adjustable rate mortgages, to 30 year fixed mortgages.  He told me that the huge amount of activity of home purchases and refinancing that has hit his firm in the last few weeks has been like a “sumami”.

Will mortgage interest come down further in 2009?  Michael’s take on this question was an emphatic NO!  He let me know that the Fed rate is between ZERO and .25% (YouTube).  He said that there is no further room for it to go down further.  Again, the mortgage interest rates have never been as low as today in U.S. history!!!  So I followed it up with the next logical question…

Will mortgage rates go up in 2009 and when?  He was just as emphatic with his answer to this question – YES, and soon!  He gave me some indicators that Buyers need to pay attention to (YouTube).  The first one was watching the stock market and see if the March 2009 rally was actually going to be sustainable.  If it continues to rally, those that are currently invested heavily in bonds will start moving back into the stocks.  He referred to a blog that Elizabeth Weintraub posted late last year titled, Top 10 Real Estate Predictions For 2009.  Here were her predictions for mortgage rates. 

“Because mortgage rates are influenced by mortgage bonds and mortgage-backed securities, not fed rate cuts, I predict interest rates could rise to 7% in 2009. Maybe more if investors continue to worry about inflation and the government adds a new supply of U.S. Treasuries to the market to offset the looming deficit.”

Michael believes that these record low mortgage rates may not last longer than a month or six weeks at the most.  The Federal stimulus package is starting to be felt in a very positive manner throughout the economy.  As the consumer confidence begins to change direction, the stock market will continue it’s climb and rates will certainly go up.  He even felt it will be a dramatic interest rate climb that will leave many Buyers in the dust who are waiting for a better time to buy.  TODAY is the day to contact your mortgage professional, and your Realtor if you want to purchase a home in 2009.  Contact me today  if you would like to talk about you needs further.