Federal Reserve Buys Bonds, Results in lowest Mortgage Rates in Decades

The Federal Reserve, in a bold attempt to stimulate the economy and assist the lagging United States real estate market has announced that it will use the proceeds from maturing securities in its $885 billion mortgage-backed bond portfolio to buy more bonds to bring interest rates to their lowest point in decades.

According to many experts, the Federal Reserve’s focus to put money in mortgage bonds could bring $20 billion or more a month of Federal buying power into the mortgage market. As of last week, the average 30-year home loan rate in Freddie Mac’s weekly survey was a record low 4.09%, which is down from 4.60% earlier this summer. Some experts believe that we could experience interest rates below 4.00%, depending on how low Treasury bond yields go.

The fact that the industry is experiencing a record number of foreclosures along with the unprecedented low interest rates makes now a truly huge buyer’s opportunity market. Traditionally, the more “inventory” a real estate market has the more bargaining and leverage power is extended to the buyer. All of these factors, coupled with the fact that the Federal Reserve is helping the mortgage market by reinvesting the proceeds of its existing investments in mortgage-backed securities into new mortgage-backed securities, rather than putting the money in Treasuries has made this the perfect time to buy or invest in real estate.

In closing, the high foreclosure rate, low interest rates and eager sellers have made this the perfect time to buy real estate in metro Atlanta. Paige Slyman is an expert in assisting and advising clients in buying and selling real estate.

For more information about leasing one of these outstanding office suites, please contact Paige Slyman directly at 770.405.0100 x 222 or email us at slymanfamily@comcast.net