Mortgage Interest Rates Expected to Rise as the Federal Reserve Raises the Discount Rate .25%

For the first time since June of 2006 the Federal Reserve increased the discount rate (rate the fed charges banks for emergency loans) .25% Thursday afternoon.  This can be taken as a sign that the emergency measures to stabilize the economy are coming to an end.  The central bank characterized this as a move to ‘normalize’ its lending fees.  While the federal funds rate (the rate banks charge each other) remains unchanged, this can be taken as a ‘warning’ that the Federal Reserve is tightening its policy.

While today’s mortgage interest rates are hovering at 4.875%, a historically low rate, economists have projected the rate to rise at least 1% during 2010.  This increase was hypothesized to begin in the summer or possibly even the fall.  After the fed’s move to raise the discount rate a quarter of a percent, this increase may well begin in the next month or two.  The tax stimulus for first time homeowners (people who have not owned a home in the last 3 years) and current homeowners (who have owned their home for 5 years or more) who want to step up is only valid on contracts accepted by 4/30/10 and closed within 60 days after 4/30/10.  This makes March & April of 2010 quite possibly the best time to buy or sell a home in the foreseeable future.

If you would like information on the Tax Stimulus & to see if you qualify for up to $8,000 from the IRS, call or email 931-624-6320 or laurie@listwithlaurie.com

For more information on selling your home and what its worth, visit http://www.listwithlaurie.com/selling.html

If you would like to explore the Clarksville TN – Montgomery County real estate market click here http://www.listwithlaurie.com/search.html

Tips for buyers thinking about buying a home can be found here http://www.listwithlaurie.com/buyers.html

For related news articles see below:

http://www.csmonitor.com/Money/2010/0219/In-surprise-move-the-Federal-Reserve-raises-a-key-discount-rate

http://www.bloomberg.com/apps/news?pid=20601103&sid=aEzB7Vg_5KJ0

http://blog.taragana.com/business/2010/02/19/stocks-turn-higher-as-fed-begins-to-dismantle-emergency-measures-for-banks-33031/

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