When Obama Gives You Lemons, Make Lemonade

When Obama Gives You Lemons, Make Lemonade
By: Nicholas A. Dunlap, CPM

Newspaper headlines can almost be read as sarcastic when they proclaim that mortgage rates have reached 6 month highs at a whopping 4.87%. However, the slight increase represents a .5% bump in just two weeks. While the Federal Reserve appears to understand the dire straits of our country’s economic climate, it is imperative they continue to act accordingly. In this case, the appropriate response is to, in the words of John Lennon: “let it be”. Leave rates low, make permanent the first-time homebuyer tax credits and keep Obama’s meddling in financial policy to a minimum. Yes, this also means continuing to allow the deduction of Mortgage Interest for homeowners/taxpayers. Nightmarish headlines in the Washington Post announced that the need to cut the deficit will “transform home financing”. That’s great, isn’t it?

So while I am certainly not panicked, I think that if you have recently tested the waters and considered refinancing or repositioning the debt on your property, now would be a good time to lock in attractive rates for the long-term. And while you’re at it, take some of that equity and put it back into some of the better-performing product types and marketplaces. There are great values out there. Transactions equal activity in the marketplace which equals jobs, growth and expansion. It’s an easy cycle to follow. Keep things churning!

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