April 29, 2010

5 Reasons Why Buyers May Be Bummed Out About the Real Estate Market

Birds are singing, flowers are blooming, trees are budding, yep, spring is here! And buyers are out in full swing, but they may be facing a few stumbling blocks in this housing market. 

Here's why:

• Mortgage rates are up.
• On March 31, 2010, the Federal Reserve stopped buying mortgage-backed securities, which means private investors will have to pick up the slack and will expect greater returns.
• As of April 5, 2010, the FHA increased the up-front mortgage insurance premium by 50 bps to 2.25%.
• On April 30, 2010, the homebuyer's tax credit is set to expire.
• Multiple offers have returned and buyers are being outbid left and right on reasonably priced homes. What's left is a heap of foreclosures and short sales, many of which require major repairs.

Ouch!! I know . . . it's enough to make you want to jump off a cliff. But wait! If there's any good news to be gleaned from what's going on now in the real estate market, it's this:

• Mortgage rates are still great. They're at historic lows (below 6%).
• Regarding the FHA policy change, some or all of the premium may be paid over the life of the loan instead of at closing.
• Although the job and housing markets lag, the economy is looking up.

I know. It's not much. But, remember, the birds are singing, the flowers are blooming, and the trees are budding, which means there's still something to smile about.

Until next time.

Be well.

Posted by: shana@lakeviewtitle.com