Mortgage Interest Rate Information

The Open Market Committee of the Federal Reserve will be meeting tomorrow and possibly Wednesday. This is the group that sets the federal funds rate which is the rate member banks charge each other for overnight loans (yes, there is still money being lent)!

Anyhow, expect the rates to be reduced another 25 to 50 "basis points" (1/4 percent to 1/2 percent) within a day or so. This could bring the 30-year fixed rates down to 5.25% or lower for the near future.

Also, there is "talk" that the Treasury Department (Timothy Geithner has been selected by president-elect Obama to replace Henry Paulson) or the Federal Reserve may subsidize interest rates for first-time buyers. This could reduce rates another one percent or so. If this happens, and it's a good possibility, I don't believe any action will be taken until after president-elect Obama's inaguration (January 20, 2009).

I'll keep you all advised.