Charles Jones Blog

 As we move further in 2010, how will the housing and refinance market react to the end of the federal government bailout? Will rates go up or down?

There appear to be differing opinions on how the housing and refinance market will respond to the end of the so-called federal bailout. According to an an article on the MBA website,  Michael Fratantoni, MBA’s Vice President of Research and Economics, “We expect that rates will rise over the next few months as the Federal Reserve winds down its MBS purchase program, and this will likely lead to a decline in refinance volume."  However, in a recent Wall Street Journal article (01/28/2010), Mark Gongloff writes: "Conventional wisdom holds that the end of the Federal Reserve's $125 tillion mortgage-buying spree will be catastrophin for housing.  But, a growing number of investors are betting that the fears are overstated and mortgage rates won't soar when the Fed leaves the market...."

Not surprisingly, I prefer the latter opinion, and think it has merit.  The success of the housing market is a large reason our economy excelled so well for so long.  When the bubble burst--in many ways--so did the economy.  Keeping interest rates low and encouraging home ownership and refinancing allows our economy to flourish.  The housing market in NJ and PA has certainly been through a lot over the last couple of years.  We have seen the businesses of friends, clients and competitors reduce in size or go out of business.  I doubt any of us have the stomach for any more of what the industry experienced through most of 2008.  And, I doubt the government does either.  The government can give investors and consumers confidence in the housing market once again.  Finding ways to stimulate the housing and refinance markets should be goals of our leaders as it will lead to the continual recovery of our economy.

That is why I am confident that interest rates will stay in check and our market will slowly return to normalcy.  Perhaps not the thriving market that helped so many flourish, but a market that we can build upon today and through the entire decade.

To read the article from the MBA website, visit:

Patrick T. Roe

Senior Vice President, Marketing & Sales


Blog Archive

Charles Jones LLC is not a consumer reporting agency as such term is defined in the federal Fair Credit Reporting Act, 15 USC 1681 et seq. ("FCRA"). Charles Jones reports do not constitute consumer reports as such term is defined in the FCRA, and accordingly these reports may not be used to determine eligibility for credit, employment, tenant screening or for any other purpose provided for in the FCRA.