Weekly Market Recap

Low Interest Rates and Low Home Prices

There was a great article on Bloomberg Tuesday related to low home prices and near historically low interest rates.  The third straight year of average declining U.S. home prices appears to be creating a boost in home sales.  In addition, mortgage rates are currently in the 4% range and homebuyers are rushing to take advantage of this double whammy (historically low interest rates plus the lowest home prices in years).

New (and existing) homebuyers are taking advantage of great prices and great mortgage rates.  Here is a quick summary of the main points from the article on Bloomberg:

·         Lower home prices driving sales.

·         Fear that mortgage rates will rise helping to motivate folks

·         Median prices at the lowest level since 2002

·         Prices are 31% lower than the 2006 peak

·         Job market gaining traction

·         Home prices have reach bottom

“The job market is beginning to gain traction, consumer confidence is improving, and even though mortgage rates have increased, they’re near historic lows,” said Mark Zandi, chief economist of Moody’s Analytics Inc.

Fannie Mae forecasts sales will jump in the coming year. Additionally, “discounts on foreclosed properties are making houses more affordable and opening the market to more people.  A sustained increase in sales may signal a bottom in values as prices fall to levels buyers can’t resist.”

Therefore, the third piece of the puzzle is falling into place for many: low housing prices with amply supply, near historically low interest rates, and now some confidence in the market place with an improving economy and with employment confidence picking up stream.

Call me, a Weichert Realtor and I can help you take advantage of this once and a lifetime opportunity to own a home.  Let us help you attain that home of your dreams from soup to nuts.