Per the Wall Street Journal, "When all is said and done, borrower psychology—and not mortgage rates—could face the bulk of any housing-market damage that stems from the Standard & Poor’s rating downgrades.
S&P downgraded the credit ratings of Fannie Mae and Freddie Mac on Monday morning to AA+ from AAA. That, of course, followed Friday’s rating cut for the United States.
The downgrades by themselves don’t appear to have done much to roil mortgage markets. The 10-year Treasury note, to which mortgage rates are closely tied, has fallen to a record low, which is good for mortgage rates."
Lawrence Yun, the chief economist for the National Association of Realtors says, “Even if [mortgage] rates were to rise because of the downgrade, this fact is less important in light of the current overly stringent underwriting standards and the general lack of consumer confidence about the economy. A 30-year fixed rate rising from 4.3% to 4.6% will not change the housing game that much, but a return to normal underwriting standards and a boost to consumer confidence will be the true game changer.”
What does this mean for you? Mortgage rates are Low, Low, Low so a house purchased now will have a low monthly payment. While others are crying over their stock values, take advantage and purchase a home at the lowest historical mortgage rate. Be the new Warren Buffett and buy when terms are favorable. You will have outsmarted most of your neighbors!
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