Mortgage Rates Fall to 10-Month Low
Mortgage rates dropped to the lowest level since Jan. 25, with the average 30-year fixed rate now 6.24 percent. According to Bankrate.com's weekly national survey of large lenders, the 30-year fixed rate mortgages had an average of 0.32 discount and origination points.
Interesting fundamentals we have:
20% or so drop in homes prices from the 2005 highs
10 month low in mortgage rates
no hurricanes
possible pent up buyer demand
coming into season (more activity with lookers, buyers and sellers)
If the politicians could reduce property taxes and home owners insurance we would be in good shape.
Interesting fundamentals we have:
20% or so drop in homes prices from the 2005 highs
10 month low in mortgage rates
no hurricanes
possible pent up buyer demand
coming into season (more activity with lookers, buyers and sellers)
If the politicians could reduce property taxes and home owners insurance we would be in good shape.
posted by Marc Rasmussen at
7:16 PM
2 Comments:
Marc said:
"Interesting fundamentals we have:
possible pent up buyer demand
coming into season (more activity with lookers, buyers and sellers)
If the politicians could reduce property taxes and home owners insurance we would be in good shape."
Marc, how do you see "possible pent up buyer demand", occurring ?
I don't see it happening any time soon because of the overhang of inventory on the market. What catalyst is going get people back to buy ?
Reducing property taxes and lowering insurance rates would surely help, but what odds do you give on that happening ?
The problems in the RE market are more tied to macroeconomic causes. There are some significant issues of excessive debt and import imbalances that the U.S. govt. has to deal with to right the ship. These issues don't get fixed overnight.
The consumer is tapped out when it comes to big ticket purchases (autos, homes, etc), and this fact is one of THE biggest keys to a healthy RE market. With the decline in housing prices, people are less able to refinance and take cash out, something that fueled a lot of the economic strength since 2001.
IMO, local RE prices will continue to drift lower going into the first half of 2007 and inventory levels will either be stagnant or actually rise a bit more.
As I've been saying since May of this year, we're likely heading for a recession that will "officially" start in the 4th quarter of this year and extend for at least the first 2 quarters of '07. There will certainly continue to be an increase in foreclosures as well. Last month foreclosures in Charlotte County rose 48% from the previous month. That's significant !
Given this backdrop, I do not believe we're at the bottom yet. The cleansing process required for the RE market will likely take longer than most "experts" think.
"Marc, how do you see "possible pent up buyer demand", occurring ?"
There are a lot of people wanting to buy right now but won't because they are a little afraid of lowering prices. Once the general public feels that the bottom has hit the buyers will start pulling the trigger.
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