Impossibly low mortgage rates could go even lower if the Fed targets MBS paying 2.5% - paper...


Impossibly low mortgage rates could go even lower if the Fed targets MBS paying 2.5% - paper that previously attracted little to no interest from real-money investors. Should a liquid market form for these bonds, it wouldn't be impossible to envision a 2-handle on the 30-year mortgage.

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  • User 353732
    , contributor
    Comments (5158) | Send Message
     
    Given that the effective after tax income and net worth of millions of middle class households keeps declining, even a 1% mortgage rate cannot induce more buying unless home prices fall yet again.
    Further ,the total cost of ownership is heavily influenced by property and municipal taxes, maintenance costs, insurance and utilities and these cost components are rising in many zip codes.
    It this total cost and risk of equity loss not merely the purchase price inflated transaction costs and cost of debt that determines the buy versus rent decision.
    In most zip codes it is cheaper and less risky to rent rather than buy.
    12 Oct 2012, 05:37 AM Reply Like
  • mweaver
    , contributor
    Comments (199) | Send Message
     
    free houses administration
    12 Oct 2012, 06:31 AM Reply Like
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