Mortgage Interest Rates Hit Record Low

Average mortgage interest rates reported by Freddie Mac hit the lowest rate since Freddie began measurement of rates more than 30 years ago.

“The Federal Reserve’s announcement that it intends to purchase Treasury securities over the next six months caused bond yields to drop and mortgage rates followed,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Rates for 30-Yr FRMs peaked last year at 6.63 percent on July 24th. With this week's 30-Yr FRM, the interest rate difference is almost 2 percentage points, which amounts to a savings of about $225 in monthly mortgage payments for a $200,000 loan.

“And potential homebuyers are taking notice of these historically low mortgage rates. Both new and existing home sales rose 5 percent in February. First-time homebuyers accounted for half of all existing home sales, according to the National Association of Realtors®. In addition, mortgage applications for home purchases consecutively rose over the first three weeks in March, based on figures published by the Mortgage Bankers Association.”

What a Trillion or so can do....

If we view the mortgage funds supply like a python...imagine it just ate a rhinoceros. The Federal Reserve "fed the python" a little over a trillion dollars this week in yet another attempt to get funds into the hands of people willing to spend them. Average mortgage interest rates fell to just under 5% just a tad above it's most recent low in January of this year. I suspect rates will fall even lower as the markets absorb the impact of the Fed's infusion. Is this a great time to be a buyer or WHAT?

Up a Little Down a Little

..with the best news being that rates remain around 5%. Contrary to what is often heard in the media, lenders ARE making loans, particularly on single family homes. The qualifications have returned to traditional ratios of income and expenses but prices on homes have come down considerably so a home is within reach for many.

Sales Units Increase as Prices Fall

February statistics show sales on a steady increase, up 19% for the first two months of this year. What's driving this, of course is a fairly steep continued drop in the average price, down 41% in January and February (as compared with 2008). The inventory of properties on the market continues to fall along with the increase sales activity and a slowing of new listings as sellers (who have the luxury) evaluate their options.

Broward County Sales Analysis

More interesting numbers on closed sales with 'distressed' properties (foreclosures/short sales) leading in UNITS SOLD but trailing in dollar volume as measured against non-distressed homes. The average number of days on market for a foreclosure property is 76; 198 for a short sale and 121 for non-distressed. Note that statistics are for single family sales as reported by the Realtor Association of Greater Fort Lauderdale.

Is Anything Selling?

Here's a case in point of what's happening in our market these days. On February 20th, I started a new section of this blog to identify what I perceive as "Best Buys" in targeted neighborhoods. The first neighborhood was my own, Imperial Point in which I identified 5 properties as Best Buys. I noticed today that THREE of the five are now UNDER CONTRACT. The lesson is that properties, priced correctly WILL SELL!

Victoria Park-Lake Ridge Best Buys

We're all hearing it's a 'Buyers' Market'; here are a few that I feel are the best buys in the Victoria Park/Lake Ridge area as of this week. Click on the link below to see what I've found. Call me if you'd like more information on any of these great homes!

Victoria Park/Lake Ridge Best Buys

Weekly Intrest Rates Up due to Bond Yields

"Mortgage rates followed bond yields higher this week following reports of record continuing jobless claims and a downward revision in economic growth in the fourth quarter of 2008," said Frank Nothaft, Freddie Mac vice president and chief economist. "Real Gross Domestic Product was revised from a 3.8 percent decline to a 6.2 percent drop in the fourth quarter mostly led by a 4.3 percent fall in consumer spending, which was the largest decrease since the second quarter of 1980.
"The housing market continues to slow as well. New home sales fell 10.2 percent in January to the slowest pace since records began in January 1963 while pending existing home sales slowed by 7.7 percent, the weakest since the series began in January 2001. More recently the Federal Reserve noted in its March 4th regional economic report that residential real estate markets remained in the doldrums in most areas, with only scattered, very tentative signs of stabilization."

Summary of 1st Time Homebuyer's Tax Credit
There is GREAT news for first-time home buyers. The Federal Stimulus Bill of 2009 provides great incentives for those interested in purchasing homes this year. While many homes are at an all-time low price, this is the time to get serious and start looking. While prices might drop slightly as the market turns, the home of your dreams may be purchased by someone slightly quicker to make a move. Don't delay any longer if you or anyone you know are seriously interested in finding your dream home.

A summary of the new law follows:
1. Up to $8,000 for new buyers: This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. This credit does not have to be repaid.
2. First time buyers defined: For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.
3. 2009 buyers only: Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.
4. Income limits: The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
5. Refundable: Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability.
6. Recapture: Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. (Exceptions will be made in certain cases, such as death or divorce.)

So, if you are ready to take advantage of this opportunity, contact me immediately. Interest rates are phenomenal and the inventory, while shrinking, still provides a large number of homes from which to select yours.