Republican policymakers are proposing a plan to reduce interest rates on 30-year mortgages by one per cent from 5.1% to 4.1%. The $300 billion plan, would be part of a $900 billion financial stimulus, with the aim of kick starting the ailing housing market, so vital to the US economy as a whole.
The plan would be intended to assist prospective new homeowners thereby stimulating the housing market, and also increase the spending power of existing homeowners by lowering their borrowing costs. It would lead to a saving of around $180 per month on a $300,000 mortgage that would be available to drip feed into the wider economy, to add to the impetus of other elements in the overall plan.
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President Obama's economic team is said to be considering the proposals, along with other leading Democrats. There is a general consensus to get the cost of mortgages down to stimulate markets, and assist in restoring confidence.
It has been estimated that each percentage point drop in mortgage rates can assist with 500,000 house sales. That should assist with the over supply of properties, that is a major factor in the continuing downturn. Of course, there is no magic wand to cure the ills of the depressed housing market.
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It is good to know that there is consensus and cooperation, between Democrats and Republicans, to help things get back to some degree of normality. There is little doubt that the current crisis continues to affect millions of ordinary Americans. Regardless of which way they recently voted, there are expectations that all their elected representatives will unite to do whatever is necessary to overcome the current malaise.
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Democrats and Republicans Consider Mortgage Plan
Democrats and Republicans Consider Mortgage Plan
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