Rates remain firm as buyers pick through the bonesby Tim Manni
Rates on the most popular mortgage types moved in opposite directions this week, according to HSH.com’s Weekly Mortgage Rates Radar. The average rate for conforming 30-year fixed-rate mortgages rose by a single basis points (0.01 percent) to 3.54 percent. Conforming 5/1 Hybrid ARM rates decreased by five basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.67 percent.
“Mortgage rates continue to hold at very favorable levels, mostly directionless over the past few weeks,” said Keith Gumbinger, vice president of HSH.com. “Financial markets have been focused on the contentious election, and with good reason, as a change of administration would of course bring new expectations for regulations and more. Even without a change at the top, there are plenty of mortgage market changes due before long.”
Gumbinger notes that “The Federal Reserve’s Operation Twist comes to a close at the end of the year, and decisions on important items such as the construct of a Qualified Residential Mortgage and rules governing how much risk a lender must retain to comply with that standard may follow soon after that. Potential borrowers might want to get their transactions completed in front of those changes, since they might push rates and fees higher in their respective wakes.”
Foreclosures, inventory down
Low mortgage rates continue to play a vital role in housing’s ongoing recovery, maximizing affordability for buyers and refinancers. Low rates are especially important as foreclosures continue to decline, housing inventory shrinks, and ongoing refinance and short sale efforts all working in tandem to help stabilize home prices.
CoreLogic reported last week that completed foreclosures were down both from the previous month and last year.
“Homes lost to foreclosure in September 2012 are down 50 percent since the peak month in September 2010 and 22 percent less than the beginning of the year,” Mark Fleming, chief economist for CoreLogic, said in a release.
Some markets across the country have even turned into sellers’ markets—something we haven’t been able to say in quite some time.
Is now the time to buy?
While the lower inventory will restrict the home sales numbers to a degree, it does mean more properties are receiving multiple offers and sellers are getting the highest possible price.
Jeff Lichtenstein, a real estate professional in Palm Beach County, Fla., says “In some areas it’s a complete seller’s market with little inventory available.”
Jody Wise, a Realtor in Chicago, says “It might be time to sit down with your agent and see if now is the time to sell. The market is active but the biggest frustration for buyers is the absence of inventory – the pickins are slim. This is made worse by the fact that the good homes (shows well, priced well) get snatched up quickly and may experience multiple competitive offers.”