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In its monthly home sales statement, the association worries aloud that buyers might lose motivation to pull the trigger if 30-year mortgage rates under 4 percent become more like the norm than some special opportunity:
Recent announcements by the Federal Reserve that they will continue purchases of mortgage backed securities, and that they plan to keep the Fed Funds rate low through mid-2015 may actually cause the pace of sales to moderate as purchasers may not feel a sense of urgency to lock-in today’s record low interest rates.
Low mortgage rates = fewer home sales. In other news, down is the new up.
The association notes, however, that the Fed’s policies “should keep housing affordability at favorable levels for the coming months.” Affordability, of course, being good for the market in the long run.