Posts Tagged ‘Federal Reserve’
26 DAYS
The Fed is going to stop buying mortgages in 26 days. 26 DAYS. Liquidity of mortgages on the secondary and tertiary markets will be drastically reduced. DRASTICALLY REDUCED!
Rates will rise 1 point at a minimum as a result of this lack of liquidity. Today’s 5.0% mortgage becomes tomorrow’s 6% mortgage, at a minimum. 6% MORTGAGE RATES.
Basic market theory holds that if rates go higher, prices will GO lower, as it will cost more to borrow money after the rise that it had before. A one percent increase in interest rates effectively adds 10% to the overall price of the property.
BUYERS NEED TO BE ATTUNED TO THIS.
As of today, nothing is going to change these hard market facts.
The market in Chicago is still declining, in both perception and reality.
This market is both a beauty contest and a price war.
Are you ready to dive in?
