The Fed has already announced that they are exiting the mortgage market as scheduled (March 31, 2010) and there doesn't seem to be any interest to again extend the tax credit. However, we are seeing strong activity in our market and even the revival of multiple offers on individual properties. I think buyers are finally realizing that this is a good time to buy while the interest
rates are down.

Also, the Fed has announced that they will be definitely exiting their plan to purchase mortgage-backed-securities. That plan has helped to keep interest rates on a 30 year fixed rate mortgage down by two full percentage points since its begining in October, 2008. The experts believe interest rates will increase immediately once the Fed backs away. Some lenders believe rates could return to the seven percent level that existed before the Fed involvement. What can that mean to buyers? You can see that even if prices continue to go down, the change in interest rates could dramatically increase monthly costs. On a $200,000 loan an interest rate increase
from 5% to 6% reduces the amount you could borrow and keep your payment the same to
$180,000. That is a 10% decrease in the amount you could borrow with the monthly payment you would be seeking; with only a 1% rise in interest rates.

So I hope buyers do not make the mistake of waiting too long to buy.

As a Realtor reviewing the statistics and the Real Estate news I feel the pressure to tell my clients to buy now before rates go up, I wonder if the buyers are feeling it too.