What is going to happen with mortgage interest rates in Eugene/Springfield? Right now the bond market is being partially supported by purchases of mortgage bond by the Federal Reserve. They have purchased about $1Trillion in mortgage backed securities so far and plan on buying almost $200 billion more between now and the end of March when they are supposed to stop buying. What will happen when the Fed is no longer buying Bonds when you are trying to buy a home in Lane County or anywhere in Oregon? Good question that I think will be answered with higher mortgage interest rates for Cottage Grove, Creswell, Veneta, Junction City, Oakridge and Florence.

David Cho, Neil Irwin & Dina ElBoghadady, with the Washington Post have a lot to say about this soon to be enacted change:

The wind-down of federal support for mortgage rates, set to end in two months, is a momentous test of whether the Obama administration and the Federal Reserve have succeeded in jump-starting the housing market and ensuring it can hold its own. The stakes for the economy are massive: If the market again falls into a tailspin, homeowners could face another wave of trouble, and it would deal a body blow to President Obama‘s efforts to get the economy on track.

There is a lot of disagreement as to whether this program has done all that it could. Should the Fed be exiting now with the housing market still so fragile? Or should the Fed continue buying securities? Interesting questions on both sides. For me, I want to know if the Fed can actually afford to continue buying securities and should they be artificially be keeping rates low? I don’t know, but I think we are about to find out. 

“Mortgage rates are the lifeblood of the housing market, and we have cautioned the Fed about the sudden stoppage of this program,” said Lawrence Yun, chief economist of the National Association of Realtors. (again from the Post article)

(This company doesn’t do business in Oregon, but I like their ad. Take a look.)

So, my best advice is to get off of the fence and get into the Real Estate market while prices and rates are low. With the probably change coming to FHA loans limiting seller contributions for closing costs, it could get a lot more expensive to purchase a home shortly. Therefore, you should give me (Fred Chamberlin) a call today at 541-342-7576/541-221-3455 cell or e-mail me. Alpine Mortgage Planning is located at 1200 Executive Pkwy., Ste. 100, Eugene OR 97401. Interest rates are low, prices of homes are low, mortgage programs are available. Now really is the time to buy.

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