Filice_A_XECO_HomeRISK_5 - Reserve is the main agency that...

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Anthony Filice October 14, 2011 XECO 212 Yvonne Shivers CheckPoint: New House, Risks and Benefits As a person that has been looking to purchase a home for about two years, I can tell you that mortgage rates and the circumstances surrounding the purchase of a house change often and sometimes dramatically. Take mortgage rates, when I first started looking to buy a home, the average mortgage rate was about 6.1%, now I am looking at an average mortgage rate of about 4.7%, which is quite a drop in the long run. Mortgage rate forecasts and predictions are varied depending on you source, with about 10% believing that rates will rise in the next 5 years and 89% believing mortgage rates will continue to decline to an average between 3.7% and 4.3%. Several factors, mainly the government control mortgage rates, as a part of inflation. Government agencies do this to control how we spend our money. The Federal
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Unformatted text preview: Reserve is the main agency that controls this. The Federal Reserve controls policies to control the amount of cash in circulation, they look to find a happy median to help regulate the economy. By controlling cash flow, the Federal Reserve in turn controls mortgage rates, because if mortgage rates are raised then less people will buy houses, lower mortgage rates will promote home buying. The government can affect the housing market and everything that goes along with it by doing several different things. When the government borrows money from the public, it will change the market. From what I have found, there is no real policy or law in affect that allows the government to change the housing market, changes in the market are usually just the product of several different policies interacting with eachother....
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Filice_A_XECO_HomeRISK_5 - Reserve is the main agency that...

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