Bill W.

Home Prices May Be Nearing Bottom, Bank Equities to Follow?

Holy Moley! Now I get it! The fed is holding a huge amount of toxic MBS from the banks and the only way they can make these debt instruments viable is to induce inflation into the mix. If interest rates do, indeed go to 3.5 % then it is not a strech to see home prices increase at an accelerated level. For folks that have houses under water (mortgage greater than current market value) lower interest rates won't help much, but if low interest rates are sustainable, then the creation of a new housing bubble will certainly float all boats.

However, I think it is too early in the game to be placing any bets on housing. I think about six months from now, we will have a better picture of how things will work out.

Respectfully,

Bill W.