Interest Rates on the Rise

If you have been on the fence about purchasing a home lately, you may seriously want to consider making the move. Today the Obama administration released their Reforming America's Housing Finance Market Report.  They layed out their vision to limit the role of Freddie Mac and Fannie Mae as backstops of the mortgage market.

One option proposed by the administration includes a new government backstop of certain mortgages under a federal 'reinsurance' model, while another would proposes a more limited backstop that would scale up primarily during times of economic crisis. The third option proposes no such government backstop beyond existing federal agencies such as the Federal Housing Administration. via the WSJ    

The one key factor all three scenarios have in common is they would force the banking system to step up their game in the housing industry and limit the role of the goverment.  This should be positive for the rest of the economy because from experience federalization of the housing market is not a good thing.  However, we all know banks like to make their money and without the government's guarantee, loans will be more expensive and harder for the individual buyer to obtain. 

With that being said if you are a qualified buyer just waiting to make that move take advantage of historic low interest rates because it doesn't look like they will be sticking around for much longer.