Rates are as low as they can go.  Mortgage lenders borrow nearly all of the money they lend and that money is borrowed from another source.  For each of these sources to operate with a profit, each has to charge a slightly higher rate.  It is impossible for that to happen and for rates to be less than the 4% to 4.5% now available.

These rates will only last as long as there is a bad economy.  As soon as businesses begin to feel more confident to hire, borrow, and invest the economy will improve and the banks will be able to lend at higher rates. 

You may have heard that businesses are sitting on a lot of cash, waiting to hire, spend and invest it in their businesses.  This sitting on funds and slow spending slows velocity of money in the market.  The passing of money between parties is called the velocity.  As the velocity picks up by consumers and businesses spending more the lenders will raise rates. 

So what?  In your marketing, your blogging, your newsletters, e-mail blasts, casual conversations and every media available to you, tell people that the slow economy is causing the slow rates and as soon as the signs are better the rates will rise.  It will happen relatively fast, in a matter of a month or less.  If they wait for a stronger economy to start looking for Real Estate, then by the time they find what they are looking for, they may end up with a rate significantly higher.  At a higher rate, they will qualify for less.  So, if they are in a position to buy then need to be looking now;  putting themselves in a position to buy.  So that when the economy shows signs of improvement and the rates begin to rise they can take advantage and not be frustrated as they chase a rising market. 

For you the Agent, you run the risk of some slower Buyers.  You also receive the benefit of more active Buyers who are respecting your advice which leads to more loyalty, more referrals and more sales. 

A big thanks to Ann Zeilingold, Vice President of First Meridian Mortgage for the information that prompted this blog thought.  Ann can be reached at Phone: 845-354-9700 azeilingold@yahoo.com.