QE3 Leads to Lower Mortgage Rates

Stop Sign

Over the last few years, the real estate market has definitely been a buyers' market - meaning that mortgage rates and home prices have been incredibly low. As a result, potential homebuyers and investors have seen unbelievable opportunities to purchase properties for well below market value.

However, many investors have been weary of purchasing too many properties in the current real estate market due to the uncertainty of the future. Specifically, the real estate market continued to tumble over the last few years with very little signs of recovery - until recently.

Now, investors and potential homebuyers alike are gaining confidence in the real estate market and are taking advantage of the still low home prices and mortgage rates. Although home prices and mortgage rates have been rising slightly lately, according to CNN mortgage rates have tumbled yet again - providing amazing opportunities for investors and homebuyers looking to secure record-low mortgage rates.

Mortgage Rates Decline

Although home prices have been rising lately indicating real estate market recovery, investors and homebuyers have been taking advantage of the still low home prices and mortgage rates. Although over the last few months mortgage rates were not at record lows, many jumped at the opportunity to purchase a distressed property for well below market value while still securing an incredible interest rate (especially in comparison to the rates of 2006).

Last week mortgage rates fell again with 30-year-fixed mortgage rates dropping to 3.49%, similar to the record low set in July of this year. Furthermore, 15-year mortgage rates fell to 2.77%, a record low.

QE3 Lead to Lower Interest Rates

Why, exactly, did home interest rates tumble? The fall in mortgage rates is a result of the Federal Reserve QE3, a plan that is designed to put money back into the economy. A key part of this plan focuses on the real estate market, with the Federal Reserve pouring $40 million per month into the market, which led to the fall of mortgage rates.

QE3 is designed to improve the real estate market and stock market; however, there have been several debates on whether or not this plan will merely drive up prices without actually creating jobs - making it so that those already struggling to make ends meet will have an even harder time paying for essential items for daily living (such as food).

In the end, interest rates on home loans have tumbled as a result of the Federal Reserve QE3 plan, which is partly designed to provide affordable home loans in an effort to move the real estate market and United States economy forward.

Investors and homebuyers can take advantage of these new, lower mortgage rates throughout the foreseeable future - reducing the overall price of their home or investment. Time will tell whether or not the QE3 plan will effectively move the country in the right direction.

Was this information helpful? Then help us by sharing:

Comments are closed.