Mortgage rates at 37-year low - If you are dreaming about a new home, your dream can become a reality! Interest rates reached historical lows this week. Read the following which was posted by the AP today:
WASHINGTON (AP) - Rates on 30-year-fixed mortgages dropped this week to their lowest levels in at least 37 years, as the Federal Reserve pledged to pour money into the mortgage market in an effort to spur the sluggish U.S. housing market. Freddie Mac, the mortgage company, reported Thursday that average rates on 30-year fixed-rate mortgages dropped to 5.19 percent, down from the year’s previous low of 5.47 percent, set last week. The rate is the lowest since Freddie Mac’s weekly mortgage rate survey began in April 1971.
Mortgage rates started falling after the Federal Reserve launched a sweeping new effort in late November to aid the U.S. housing market by purchasing up to $600 billion of mortgage-related securities and other debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks. A daily survey found that the national average rate fell even lower Wednesday. Rates on 30-year, fixed mortgages was 5.06 percent, according to financial publisher HSH Associates, the lowest since the 1960s and down from 5.3 percent Tuesday. It was the best news in months for anyone looking to lock in a 30-year, fixed-rate mortgage. But it was not expected to be a cure-all, and borrowers already in danger of foreclosure probably won’t be able to take advantage because only borrowers with stellar credit can qualify. “It’s a call to action for homeowners looking to get out of adjustable-rate mortgages,” said Greg McBride, senior financial analyst at Bankrate.com. “Unfortunately, it’s not an equal-opportunity party.”
Meanwhile, rates this week fell on 15-year fixed-rate mortgages to an average of 4.92 percent, down from 5.2 percent last week, Freddie Mac said. Rates on five-year, adjustable-rate mortgages fell to 5.6 percent, compared with 5.82 percent last week. Rates on one-year, adjustable-rate mortgages dropped to 4.94 percent, from 5.09 percent last week. The rates do not include add-on fees known as points. The nationwide fee for 30-year and 15-year mortgages averaged 0.7 point last week. The fee on five-year, adjustable-rate mortgages averaged 0.6 point, while the fee on one-year adjustable-rate mortgages averaged 0.5 point. Mortgage application volume jumped last week, fueled by borrowers seizing on lower rates to refinance home loans, the Mortgage Bankers Association said Wednesday. The trade group’s seasonally adjusted application index rose 2.9 percent for the week ended Dec 12.
The Federal Reserve, aiming to free up lending and jolt the economy back to life, on Tuesday cut the federal funds rate from 1 percent to a target range of zero to 0.25 percent and pledged to keep funneling money into the market for mortgage investments. Mortgage brokers are already reporting a surge of calls from borrowers trying to take advantage of the Federal Reserve’s extraordinary actions. On Wednesday, some mortgage brokers were quoting interest rates of close to 4.5 percent for people with strong credit and hefty down payments.
Falling interest rates mean Americans could suddenly find billions of extra dollars in their pockets at a time when consumers have sharply cut back on spending in the face of rising unemployment and declining household wealth.
The inventory is great, sellers are motivated, interest rates are low. So, tell your sons and daughters, friends, and acquaintances the window of opportunity is now!
Posted by Christina Rickey at 12:07 |
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Broker Report:
Year-to-date and November 2008
HOME SALES
Year-to-date and November home sales in the Birmingham area are down, as are prices, but we have some positive news. MLS inventory continues to move in the right direction with 10,994 listings in November compared to 12,979 in November 2007. This represents 1,985 fewer listings in MLS now compared to one year ago or a 15 percent drop. The Year-to-date report shows the average price of Birmingham area homes has dropped 4.5% which is less than other markets around the country.
When will the home sales market rebound? No one knows. Rob Couch, former General Counsel for HUD for the Bush Administration, was guest speaker at the BAR Broker Meeting held November 24th. He indicated that there are many variables affecting the economy. In addition, reporting of negative economic news continues to shake consumer confidence. As a result, buyers are sitting on the fence, waiting to see what happens. Some are concerned for their job stability, or they believe they will be unable to sell their existing house quickly, so they are waiting to buy.
Some good news!
SmartMoney Magazine (November 2008 issue) lists Birmingham as the number 2 market in the nation in a survey of the top 25 cities “ready to rebound”.
Homes right now are more affordable; mortgage rates are at historic lows; and sellers are motivated. Sellers, worried about getting less than the asking price for their existing homes, may be able to make up the difference with the current lower mortgage rates and a more affordable price on their next buy.
Foreclosures are not as difficult a factor in the Birmingham area market as in other areas of the country.
As the current buyers market gives way to a more balanced market, demand for homes will increase. When buyers get back, competition for available homes will increase and prices will be affected.
Real estate remains the best investment a person can make and we believe that housing will lead the way to a national economic recovery.
November Report
November 2008 Total Sales: 603
November 2007 Total Sales: 1,183
This represents a 49% decrease…the lowest number of closings for a November in over 12 years. The September 2008 Wall Street crisis has contributed to the slow down of November closings.
Here is a quick look at November prices in recent years:
Nov 2008: 603
Nov 2007: 1,183
Nov 2006: 1,485
Nov 2005: 1,302
Nov 2004: 1,126
Nov 2003: 926
Nov 2002: 922
Nov 2001: 790
Nov 2000: 701
Nov 1999: 790
Nov 1998: 769
Nov 1997: 631
November 2008 Average Price: $179,837
November 2007 Average Price: $193,391
This represents a 7% decrease in average price for this month.
The year-to-date average price is now 4.5% behind last year.
Here is a quick look at November average prices in recent years:
Nov 2008: $179,837
Nov 2007: $193,391
Nov 2006: $189,640
Nov 2005: $188,640
Nov 2004: $184,732
Nov 2003: $161,919
Nov 2002: $162,848
Nov 2001: $164,353
Nov 2000: $154,518
November 2008 Median Price: $139,900
November 2007 Median Price: $158,000
This represents an 11% decrease in median price for this month.
The year-to-date median price is now 3.6% behind last year.
Here is a quick look at November median prices in recent years:
Nov 2008: $139,900
Nov 2007: $158,000
Nov 2006: $159,900
Nov 2005: $160,000
Nov 2004: $155,000
Nov 2003: $135,300
Nov 2002: $140,750
Nov 2001: $129,950
Nov 2000: $127,000
November 2008 Days on Market: 92* adjusted to exclude new construction sales
November 2007 Days on Market: 103* adjusted to exclude new construction sales
November 2008 Inventory: 10,994
November 2007 Inventory: 12,979
This represents 1,985 fewer listings in the MLS for this month or a 15% decrease
YEAR-TO-DATE REPORT
(January through November)
2008 Total Sales: 11,656
2007 Total Sales: 16,300
This represents a 28% decrease in total sales
2008 Average Price: $189,786
2007 Average Price: $198,710
This represents a 4.5% decrease in average price
2008 Median Price: $154,600
2007 Median Price: $160,400
This represents a 3.6% decrease in median price
2008 Days on Market: 99* adjusted to exclude new construction sales
2007 Days on Market: 96* adjusted to exclude new construction sales
YEAR-TO-DATE REGIONAL REPORT:
2008 NORTH Total Sales: 823
2007 NORTH Total Sales: 1,036
This represents a 20% decrease
2008 SOUTH Total Sales: 5,351
2007 SOUTH Total Sales: 7,913
This represents a 32% decrease
2008 EAST Total Sales: 3,309
2007 EAST Total Sales: 4,494
This represents a 26% decrease
2008 WEST Total Sales: 2,173
2007 WEST Total Sales: 2,857
This represents a 24% decrease
These statistics compare total residential sales for November 2008 vs. November 2007 as well as Year-to-Date statistics as compiled by the Birmingham Area Multiple Listing Service, Inc. of the Birmingham Association of REALTORS®.
Neither the Birmingham Association of REALTORS® nor its MLS guarantees or is in any way responsible for its accuracy. Any market data maintained by the Association or its MLS does not necessarily include information on listings not published at the request of the seller, listings of brokers who are not members of the Association or MLS, unlisted properties, rental properties, etc.
Posted by Christina Rickey at 02:53 |
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Have you been curious as to what the recent historic rate drop has meant to a buyer’s bottom-line? Here’s a quick snap shot:
$400,000 Loan Amount on Friday (11/21) at 6.375% = P&I $2,496
$400,000 Loan Amount on Friday (12/05) at 5.125% = P&I $2,178
That’s a $318 per month savings!! OR you can afford 13% more house with the same P&I payment!!
NOTE: a $400K loan amount at 5.125% is comparable to a $348K loan amount at 6.375%
$300,000 Loan Amount on Friday (11/21) at 6.375% = P&I $1,871
$300,000 Loan Amount on Friday (12/05) at 5.125% = P&I $1,633
That’s a $238 per month savings!! OR you can afford 13% more house with the same P&I payment!!
NOTE: a $300K loan amount at 5.125% is comparable to a $261K loan amount at 6.375%
$200,000 Loan Amount on Friday (11/21) at 6.375% = P&I $1,248
$200,000 Loan Amount on Friday (12/05) at 5.125% = P&I $1,089
That’s a $159 per month savings!! OR you can afford 13% more house with the same P&I payment!!
NOTE: a $200K loan amount at 5.125% is comparable to a $174K loan amount at 6.375%
$100,000 Loan Amount on Friday (11/21) at 6.375% = P&I $624
$100,000 Loan Amount on Friday (12/05) at 5.125% = P&I $545
That’s a $79 per month savings!! OR you can afford 13% more house with the same P&I payment!!
NOTE: a $100K loan amount at 5.125% is comparable to a $87,000K loan amount at 6.375%
Please tell your sons, daughters, and friends, now is a great time to buy! Have them give me a call, I am always available to answer their questions and update them on the Birmingham real estate market.
Posted by Christina Rickey at 09:58 |
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Christina Rickey 
