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Market Analysis

Market Analysis

(We attempt to update this consumer comment section at least weekly and sometimes more frequently should news warrant. But, there are times when we are on vacation or there is other interference and an update is delayed. If you find that the comment is out dated, please check back. We will do our best to remain as current as possible in helping you determine the direction of long term interest rates. Thank you!)

June 22, 2010

 

The economic news roller coaster continues. In spite of home mortgage interest rates being at their lowest level in nearly decades existing home sales declined. While many attribute the decline to the elimination of the home buyers’ tax credit program that may be too simple an answer.

 

Nationally, inflation appears to be in check, home inventory appears adequate and home values seem stabilized. The inability from Washington to affect the unemployment situation in any meaningful way is perhaps the biggest reason for the continued lag in home purchasing. People either out of work or concerned about the continuation of their employment don’t buy homes, regardless of how low the home values and/or interest rates are.

 

Internationally, economists still are split on the impact that the European economic difficulties are having on our U.S. economy. China’s devaluation of their currency is another concern nationally as it could impact Chinese investors’ willingness to purchase our debt.

 

The Federal Open Market Committee (FOMC) meeting on Wednesday may provide a glimpse of how the FED anticipates this market continuing. In the meantime, potential home buyers have some decisions to make. With interest rates at near their historic lows some are putting off home purchases because of worries that home prices will continue to fall. Others anticipate that rates could fall more. Waiting for rates to decline more, however, could be a mistake. The risk is more likely that rates will increase. 

 

The “move up” market continues to struggle as too many would-be seller/buyers no longer have sufficient equity in their current homes to allow for a move up transaction. This has an impact on the amount of inventory available and, in turn, tends to stabilize home values.

 

The media continues to suggest that loans are hard to acquire. While qualifying guidelines have stiffened a bit, home financing is alive and well. Acquiring a loan now requires full documentation and a little more effort on both the buyers and lenders part, but this remains good time to buy. Conventional financing has reintroduced the 95% loan to value ratio loan (requiring only 5% down payment) but a borrower is require to have a credit score of 720 or better. The Guaranteed Rural Housing loan is still popular as a 100% loan option for buyers with minimal cash and “reasonable” qualifying standards.  Although FHA loans have toughened their qualifying requirements they are still available with 3.5% down payment.

 

No one knows what will happen moving forward. Our best advice is to purchase a home when you’ve found the “right” one and are able to acquire acceptable financing. In order to avoid disappointment, we urge that one gets pre-approved for a loan even before looking at homes to purchase. Call us at Humboldt Home Loans today for all of yur real estate finance information and/or a FREE pre-approval consultation and be assured of your ability to purchase. 

John Fesler      269-2318                     Jody Harper    269-2304        

You may find several tip sheets (found in our "tip sheet" section of this web site) interesting as you determine if you should proceed with either a purchase or refinance transaction . . . check out "Never Been a Better Time to Buy", "Refinancing" and "Locking the Interest Rate"..

Here are a few additional tip sheets of particular interest. You may view my complete tip sheet table of contents by clicking below.

Acquiring a Loan via the Internet

Capital Gains Tax Clarified

TDS Required in All Sales

Preparing your home for sale

Sellers should be pre-approved

Real Estate Advertising

Credit Scoring . . . here to stay


Click Here for
Complete Tip Sheet
Table of Contents