Let's pray long term rates are going nowhere also. In the place I live in; residential real estate, what matters is that long term rates stay low. It will be one of the fundamental components to any rebound from this financial crisis we have been in for the last 24 months.
Housing remands one of the foundations of the US economy.
The last thing the our government should do now is to remove the support for lower home rates.
It appears by the comments below that they may not understand the repercussions of a let down in an already declining housing market.
WASHINGTON, D.C. (New York Times) It was the most optimistic assesssment of the economy in more than a year. Still, the term the Federal Reserve used Wednesday to describe the good news was �leveling out.
The Fed said it will keep its benchmark short-term interest rate at effectively zero for some time. At the same time, it announced it would finish the program to buy $300 billion in Treasury bonds by the end of October. (The 300 billion was going to buy mortgage and treasury bonds. This announcement that they will cease to buy treasuries will effect mortgage rates in a negative way.)
The Fed's move to keep rates unchanged was no revelation, said Mark Dotzour, Real Estate Center chief economist.�The federal government appears to have decided to postpone the recognition of the losses that banks have incurred. It appears that we are now going to amortize those losses over a period of years, and keep interest rates low to allow banks to earn their way out of the losses they have incurred. I would anticipate rates to remain near zero easily through the end of this year.
