Mortgage Rates And the Real Estate Markets in Late 2008?

There is some encouraging news about the real estate markets in general across the country. One of the prevalent trends is that there have been more home sales reported this year (2008) than last year (2007). Another spot of good news is that interest rates have gone down a lot since the Feds took over Fannie Mae and Freddie Mac. The bad news is that home values in general across the US continue to decline. Although the decline is not as sharp as it has been.

Seek Local Niche Real Estate Agent Guidance
It is difficult to generalize nationwide what is going on in real estate because there are so many different micro markets in all the metropolitan areas around the US. One neighborhood will be up while the adjacent neighborhood will be down. The best advice one can give and one can get about buying a home in a particular area is to seek out a knowledgeable real estate agent who specializes in a localized area of your city.

If you have a concern about buying a home to only hold for a few years while you are on a temporary job assignment, for example, then buying a home in a still declining neighborhood might not be such a good idea. But if you are planning on staying a while, buying in a still declining area of your city might not be such a bad thing. In fact it could play to your favor and help you get a good deal from a desperate home seller. Again, your efforts to find a good deal would be aided greatly by the services of a real estate agent who services the particular area where you are looking to purchase.

Interest Rates Going Down After Fed’s Take Over Fannie Mae and Freddie Mac
In early September 2008, the US Government stepped in and took over Fannie Mae and Freddie Mac. As this happened, mortgage interest rates took a sharp dive down. The hope of all involved in the real estate and mortgage industries was that this drop in interest rates would spawn a turnaround in the markets.
While this makes sense that with lower rates more people would be able to qualify for mortgages which would allow for more real estate home purchases and refinances. What has happened however is that underwriting guidelines and loan program qualification criteria have gotten very restrictive since the mortgage crash of 2007 making it much tougher for home buyers and home owners to qualify for mortgages.

Wait For The Real Estate Market To Run Its Course
With rates down and it being harder for people to qualify it seems like we’ll be waiting for the market to make its own turn which will be caused by housing inventories to decline. With a less inventory, buyers will then begin competing with their bids which will increase sales prices. As sales prices increase so do appraised values and home values. So is it the right time to buy, who knows – only you do – do you want to buy if you do then do it. If not, don’t. Pretty simple. Do you need to buy? If so, then do it. If not, then don’t. Again, pretty simple.