So, is it time yet for optimism in the residential housing market?

Thinking of buying a house? Looking to refinance your current mortgage? Is this the right time? These are the big questions of the day that everyone has been asking.

We at www.MylesTitle.com  and www.MarylandCommercialTitle.com sure hope so. Like us, you — the banker, builder, investor — would like nothing but an up-tick in the market.

So, what are others saying ….Experts, according to a recent CNBC article by Jeff Cox reports that perhaps we should buy and/or refinance very soon, if not now.

The best time to make your move may very well be, now. Mortgage rates may not go much lower than they are right now, and are likely to start rising.

While mortgage rates took a dip Wednesday, April 30, 2008, after the Federal Reserve announced it had lopped off another quarter-point on short-term interest rates, the drop is not expected to last long. In fact, most experts think home loans will only get more expensive. Here are a few things to think about, when deciding what to do:

• Freddie Mac reported Thursday, May 1, 2008, that mortgage rates averaged 6.06 percent this week, up from 6.03 percent a week before. The rate represented a seven-week high and signaled that economic factors would continue to pressure mortgage costs. 
• All these (Fed) cuts have essentially done almost nothing for borrowerswho are looking for 30-year fixed mortgages. You’ve got 300 basis points of Fed cut and, the only thing we have seen is all of 40 basis points of reduction in fixed mortgage rates. Bankrate lists 30-year rates at 5.80 percent, exactly where they were a week ago before the Fed move.

The expected trend upwards means little incentive for refinancing, and recent trends in mortgage applications have reflected a continued pullback in new home loan requests as well.

But that doesn’t mean there are no winners in the current housing market. Here are  a few scenarios that are ripe to yield positive results:  

• People should be looking to buy a home at a time when prices continue to tumble and are among the few saving money ideas these days. The national median single-family home price in March tumbled 8.3 percent from a year ago to $200,700 
• Those holding home-equity-lines-of-credit (HELOC) are winners, also. They are driven by the prime rate and will continue to drop, though the lines are increasingly difficult to obtain as banks tighten credit standards. 
• Ironically, holders of adjustable-rate loans, both prime and sub-prime — also will benefit as overnight rates, also referred to as LIBOR, fall. Resets for adjustable mortgages are expected to be less severe in 2008 than in previous years.

There is some good news, but do not expect the trend to last. The Fed has been indicating its rate-cutting posture is at or near a close.

Tags: Refinancing, Residential Housing Market Trends

Posted in Real Estate Brokers, Residential Real Estate, Attorneys, Bankers, Home Equity, Mortgages, Market Trending | No Comments