“The Federal Reserve kept its key interest rate near 0% and appeared ready to do so for the foreseeable future, after declaring Wednesday that despite signs of improvement, the nation's economy is likely to remain weak.  The fed funds rate is used as a benchmark to determine interest paid by consumers on credit cards and home equity loans, as well as the rate paid on many business loans.” – CNNMoney.com  12/16/09

In general, it’s good news that the “key interest rate” will stay near 0%, but it doesn’t prevent inflation from mounting which will surely spur the Fed to begin hiking rates.  In addition, the Fed’s stance doesn’t mean first mortgage rates will remain at these ultra-low levels.  They can and likely will edge up in the new year as most economists, bankers and government officials agree.   In 2009, the government was able to suppress rates to a degree, but their best tools for doing so – their re-purchase of government issued debt – is quickly fading as was intended over time.  

In the meantime, we will continue to enjoy what we have… very good rates.   They have ticked up about a quarter-point in the past week but this is some of the natural ebb and flow which will likely evolve into a trend-line pointing north as 2010 unfolds.    Nothing beats a strong catalyst – like the expected rise in mortgage rates - to get prospective buyers off the fence.  Let’s leverage it together.