Existing Home Sales Show Promise:
Existing Home Sales were released last week by the National Association of Realtors. Their figures show that December's numbers were down 5.3% for the month and that when you compare January 2009 to January 2008 it was a difference of -8.6%. Both of these numbers received a lot of media attention that used the data to continue to paint a negative picture of the housing industry.
But buried in the report was some news that is very encouraging: Inventories fell to a 2 year low! They reported that the existing home inventory fell to 9.6 months. This is very important because economists believe that once we get close to a 6 month level it will signal the bottom of the housing market. Each month we get closer and closer to that goal. When we get to that level home prices will stabilize and begin to increase. This means that buyers should take advantage of the temporarily low price levels now. Remember you make money when you buy the home not when you sell itJ
What happened to rates last week?
We lost over 70 basis points over the last week causing 30 year fixed interest rates to rise to our highest levels in the past two months.
The slide in interest rates is largely due to the mortgage backed securities market's fear and concern about the proposed "Cram Down" legislation that could potentially give federal bankruptcy judges the ability to unilaterally lower interest rates and principal balances on existing mortgage contracts.
This could cause mortgage holders to lose large sums of money. To offset that potential loss, mortgage rates must rise.
What to watch out for this week:
The are many major economic reports that will hit the market this week. They each have the ability to affect mortgage rates. I will watch these reports closely for you and let you know if there are any big surprises. Let me know if you would like a list of when the reports will be released.
Until Next time Here is to your success! Jason Wheeler 866-833-7413 | Come to a FREE Event | Subscribe To My Blog | How I Stay Successful |
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