Apparently it's not all doom and gloom in the housing market this holiday season. The Mortgage Bankers Association registered a 37 percent increase in applications for house loans and a 39 percent increase in home purchases using FHA mortgages; as reported by Kenneth R.Harney of RealtyTimes.com. Not only were applications for refinancing pouring in, but also applications for new purchases. In a market that has been stagnant for months, this is big news.
Could this shining star be a sign of something even more significant than an increase in home buying? Perhaps that ever present cloud of reluctance and unwillingness to invest is dissipating? Has the holiday season brought a sense of hope, or shone a light at the end of this dark economic tunnel? It's possible, but more likely the increased interest in the housing market was prompted by the sudden half point drop in lending rates to 5.47 percent.
Apparently, the government backing of Freddie, Fannie and Ginnie Mae gave investors the confidence they needed to reinvest; reducing the necessity for increased mortgage rates. Now consumers are seeing rates reminiscent of 2003 and 2004 levels with fixed five year rates under 5.5 percent.
More seasonal good news arrived with the report that sales of new single-family homes went up by 2.7 percent in early fall. Apparently the percentage of unsold inventory (all those new houses sitting empty), dropped to 4.5 percent for the year. It is hoped that this number will be further reduced with the advent of lower mortgage rates.
In addition, lumber prices have decreased quite dramatically – up to 34 percent for some products. This, including the number of available lots and competitive labor prices has contributed to an increase in sales of custom homes. Steve Baudo, owner of Baudo & Associates Home Builders, Inc. has reported an increase in higher end homes in the $1,000,000 plus range. Building a home in today's market makes sense on so many levels. In addition to great financing rates, increased lot selection and availability of skilled trades, you have builders offering incentives never before included as standard features. In a year or two, the same house may cost thousands more to build.
Santa has indeed brought us a buyers market that has surpassed our wildest dreams. What a welcome change from a very long year of foreclosures, housing gluts and general uncertainty. Low fixed rates and a stimulated housing market – now those are gifts that keep on giving!
Author Resource:-
Learn more about homes in the For Sale By Owner New Castle County DE category, at HomesByLender.com. This site has regularly updated For Sale By Owner listings in every state in the nation - buyers and sellers interested in FSBO can use this site as their primary resource.
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