At last, are we really close to the bottom of the housing market? Read the below message from William Raveis Mortgage’s own Executive Mortgage Banker Mark Hawkins. You decide. I believe we are extremely close if we are not there. If rates go any lower, the threat of deflation is knocking on the nation’s doors.

James Martin

SPECIAL UPDATE

Best Rates In Years:

Currently the mortgage rate environment is in the midst of quite a rally. Over the last week rates have plummeted following the Fed’s announcement that it will buy debt and mortgage backed securities from mortgage finance companies Fannie Mae and Freddie Mac. This news has caused rates to drop over 1/2 percent in the last week

The rates available currently are on par with the best rates that have been available at the all time lows in the market earlier this decade. This opportunity only comes around on very limited occasions.

Historically the best rates during the year arrive during the winter months of November, December and January. This has occurred like clockwork each of the last 4-5 years and we are definitely finding ourselves smack dab in that midst of that trend again this year. In fact, the deals out there are sweeter right now than they have been the last few years. I have on a few occasions over the last several days been able to quote refinance rates at 5.25% on a 30 Year Fixed product – with no points! This is an amazing rate!

More Positive Headlines:

Government officials have been under enormous pressure to help stabilize home prices and prevent foreclosures. At the same time, they don’t want to appear to be using taxpayer money to bail out undeserving individuals and institutions. As Fed Chief Bernanke stated, the solution may involve a “full range of coordinated measures” aimed at different aspects of the problem.

The government has already put many programs in place, and others are under discussion. The Fed and the Treasury have used billions of dollars to provide financial institutions with capital to make loans. Yesterday, the Treasury announced that it is considering a plan which would offer below-market mortgage rates for some loans used to purchase homes. The program being discussed involves the Treasury investing in MBS guaranteed by Ginnie Mae, Fannie Mae, or Freddie Mac, which contain purchase money loans at a specified rate (4.5% was the initial proposal). The lower rates will not be available for refinancing loans. There has been no indication that these loans will have special underwriting or eligibility requirements.

Keep in mind, the timing and the final form of this latest program is not known. As we have seen recently, most notably with the $700 billion TARP rescue plan, government programs can change significantly before their implementation. The incentive to execute such a plan is compelling, however. Lower mortgage rates make homes more affordable. As more people purchase homes, prices will stabilize more quickly and new home construction will pick up, giving the overall economy a much needed boost.

Mark Hawkins

Executive Mortgage Banker

William Raveis Mortgage