The Government is talking about the possibility of the Treasury Department buying up 30 year fixed mortgage backed securities from Fannie Mae and Freddie Mac so that we can push down the rates to 4.5%.
This would be excellent news to kick start the housing sector which is stuck in the mud now. Wouldn't it be wonderful to allow people to have reasonable mortgage rates so that people can buy or refinance their rates? Finally, after months of helping corporations, an effort to help the regular homeowners is being discussed.....
I know from first hand experience that buyers are sitting on the fence because they are unable to get loans from banks. An interesting situation because for buyers, this an excellent opportunity to buy, but being unable to get the loans to actually commit to the purchase.
As we have learned over the last couple of months, in order for our economy to strengthen, consumers must start spending to drive up demand for serivce and products. Many economists believe we need to get the housing sector moving first to kick start our economy. And as we know from experience, when mortgage rates drop, people start buying homes. Let's all hope that this talk transforms into action.
Steve Mun, Silicon Valley Realtor
www.stevemungroup.com
Wishing you and your loved ones a wonderful long weekend.
Steve Mun, Silicon Valley Realtor
www.stevemungroup.com
Steve Mun, Silicon Valley Realtor
www.stevemungroup.com
Market information
As of 10/27/08, the Absorption Rate for Single Family homes was 7.61 months and Condos/Townhomes was 7.67 months.
Absorption Rate projects out into the future the amount of time (in months) it will take to sell a typical home if it come into the market place now. Simply put, it is a formula which looks at the numbers of homes sold in a designated area in the past (typically a full year) and compares those against the number of homes that are unsold in the marketplace (right now), to come up with the projection. It is perhaps the single most important formula in making home buying/selling decisions, yet only a handful of Realtors seem to discuss it. I hope you find this information useful. It will be updated on a monthly basis.
According to National Association of Realtors (NAR), the real estate market is defined as follows:
More than 6 months of supply = Buyer's Market
6 months of supply = Balanced Market
Less than 6 month of supply = Seller's Market
Steve Mun, Silicon Valley Realtor
www.stevemungroup.com
A little reminder for everyone: until the end of this calendar year (2008), the FHA insured loan limit for “Jumbo” Conforming Rate will remain at $729,750; but starting in 2009, that limit will change permanently to $625,000.
This means for whatever reason, if you have to buy this year, then it will be the last opportunity for you to participate in this special program and be permitted to borrow up to over ¾ of a Million dollars to purchase your home. Remember, any amount above and beyond the conforming rate limit will be more difficult for most borrowers to obtain and will come with significantly higher interest rates, so if you must buy, then it will be a great chance for you to buy now.
Steve Mun, Silicon Valley Realtor
www.stevemungroup.com
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