Market Talk
I have been reading about how home sales are up and have risen for the past 5 months. This is supposed to be a sign that the housing market’s supply over demand is leveling out. Knowing that a lot of vacant homes are not yet listed and that mortgage companies know now that foreclosure is cheaper than modifying a loan, I believe we will see more supply hit the streets. With school starting soon, the summer rush to buy a home will slow down. Though the rush to be in a new home by the holidays may prove to be a good market to be in. Fall is typically a great time to buy as sellers tend to be more negotiable. With out the hustle and bustle of the spring and summer home buying frenzy, those that need to sell will be ready to make a deal.
Mortgage rates are still great and in the low 5′s for a conforming 30 year fixed. This assumes good credit and the ability to qualify. It truly is a great time to buy or refinance if you can. No one knows how long these rates will last and there is certainly a lot of information that says, by the end of the year, rates will increase. I have covered this many times in previous posts, but in short we have an oversupply of mortgage backed securities on the secondary market and not enough investors buying them. This means more supply and not enough demand, which makes rates go up so that investors are enticed to buy. Aside from this when inflation goes up so will rates. The Fed will also play a role in this as they are currently buying the mortgage back securities, but will stop by December 31st. Even with out the inflation concern you can see how an already over supply, and losing a major purchaser of the supply can cause even more of an over supply, pushing rates higher.
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Matt Steinmetz
2151-P Salvio St.
Concord, CA 94520
Phone 925-671-9501 x119
msteinmetz@envoymtg.com
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