Fed $600 Billion Plan Keeps Interest Rates Low in Texas

• 

Low VA Rates

The Texas housing market continues to be one of the best buyers' market in the nation

Lehi, UT (Vocus) December 5, 2010

The Federal Reserve recently announced its latest effort to help U.S. homeowners by purchasing up to $600 billion of government bonds through June 2011.

The mass expenditure by the Feds revolves around the desire to keep lending rates low. The past six months have provided record lows for home interest rates with rates consistently below 4.5% and currently around 4.25% for a fixed 30 year loan.

The Fed hopes the large purchase will loosen the supply of credit and stimulate the economy and help potential homeowners save money on low interest rates.

For Texas homeowners, the $600 billion Fed purchase will help the housing marketing continue to be one of the best buyers market in the nation.

Owner of LowVARates.com, Eric Kandell, feels the $600 billion dollar purchase is a huge boost for buyers and particularly in Texas.

“The Texas housing market continues to be one of the best buyers’ market in the nation,” Kandell said. “When you consider the interest rates are as low as 4% and the housing market is dirt cheap, there has never been a better time for veterans to buy a home in Texas.”

Economists and financial forecasters are saying that Texas is one the rebound and on the verge of economic recovery. Because the housing market is still recovering, potential Texas homeowners have a great opportunity to get a great deal on a home.

In the past three years, the Federal Reserve has reduced the Fed Funds target rate 10 times. The Fed wants to reduce the target rate to help more eligible homeowners qualify for and secure homeownership. Since the major fall of 2008, the Fed has made a number of strategic moves to keep interest rates low.

The other major purpose of the Fed bond purchase is to have more control over long term interest rates. The purchase of bonds helps drive prices up and conversely helps home and other interest rates drop.

This is not the first time the Fed has attempted to drive prices up. In 2009, the Fed bought over a trillion dollars of mortgage-backed securities in an attempt to salvage the plummeting housing and lending market. One of the main affects of the trillion dollar purchase was the lowest interest rates in the history of the lending market.
Many current homeowners looking to sell are caught in a tough situation with skewed prices devaluing their property. However, homeowners looking to sell may decide to hold off and refinance their home loan saving hundreds of dollars a month.

Texas housing prices per square foot are some of the cheapest in the nation. Homeowners in Texas do pay higher property taxes, but the bang for your buck per square foot in Texas is extremely cheap.
With the recent surge in the Texas economy and the $600 billion dollar Fed purchase, many homeowners are still finding it hard to sell their home.

“With so many houses on the market it may be wise to hang tight and look at getting locked into a lower interest rate,” Kandell said. “There is no reason to accept a 5% or higher interest rate with the current condition of the market.”

The $600 billion dollar purchase will not take place all at once, but will be spread throughout the next eight months with an estimated $75 billion spent per month. This will likely not be the last purchase by the Fed to help control rates and spur economic growth.

About LowVARates.com
For the past 20 years Low VA Rates has been dedicated to serving veteran homeowners. We specialize in providing Texas VA loans to qualified veterans for mortgage purchases and refinances. These loans provide lower interest rates and monthly payments than other traditional or conventional loans.

VA loans are currently the only program left that allows no-money-down loans providing a secure mortgage option guaranteed by the Federal Government. Our professional staff and loan officers will assist you to lock in low interest rates and take advantage of the unique opportunity provided through VA loans.

###

PDF Print