The Treasury Department is considering a plan to boost the depressed national housing market by easing mortgage rates on new home loans.
The plan, which is in the development stages, would bring loan rates down as low as 4.5%, a full percentage point lower than the prevailing rates for 30-year fixed mortgages.
The plan, which was first reported by the Wall Street Journal, was confirmed by CNBC.
My thoughts: The latest plan from the government to stop the slide in national home prices sounds better than most of the other ideas that I have heard. My understanding of the new proposed program is to offer goverment backed low interest loans for new home purchases. Apparently, the plan does not include refinancing for those who are in trouble. However, I wonder if the news of this plan will actually slow the buying process down in the short-term? Why buy now, let’s see what happens with this program.
Wait. On the negative side, didn’t other countries try this idea in the past. Did it work?
I’ll file this under – Turning Japanese