countyofcastles (![[info]](http://l-stat.livejournal.com/img/userinfo.gif){kind=small} countyofcastles) wrote,@ 2008-09-10 11:46:00 |
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Government buyout of Fannie Mae and Freddie Mac has interesting upside for buyers
From MSN Money: http://blogs.moneycentral.msn.com/smarts
Basically, since the announcement of the government buyout of Fannie Mae and Freddie Mac, rates on mortgage loans dropped dramatically. Bankrate has this to say about it:
Now, only time will tell whether the rates will continue to stay lower or not. Lending standards are still fairly tight, and I highly recommend getting pre-approved by a lender prior to beginning any house search, HOWEVER, the advantage this brings is that when mortgage rates drop, affordability rises.
Think of it this way, the higher the mortgage rate, the higher your payment on the same property. Likewise, if you consider that you can afford $X dollars per month and no more, then when mortgage rates drop, you can afford more house for the same payment.
Assuming that rates stay low - and there's no guarantee that they will - then this fall will be a great time to purchase property. As we get closer to the holidays, more and more buyers drop off the radar, figuring they'll start again next spring. This is a historical trend, as spring is considered the "hottest" time for the real estate market, with the most sales taking place. As a buyer searching for a great deal on property, then, obviously the best times to buy are when there is minimal competition from other buyers, and when hungry sellers abound. Though it may seem counterintuitive from a convenience standpoint, one of the best times to get a great deal on a home is going to be smack in the middle of the holiday season.
After Halloween, buyer activity will really begin to slow down, and pretty much tank in the period between Thanksgiving and New Years Day. Last year, buyer activity dropped so low that experts were suggesting that we may have reached "inherent demand" That is, only the people who absolutely had to buy and sell (death, divorce, job moves, etc.) were doing so. There are a few factors in play this year that may or may not prevent sales from getting as slow as last year, but regardless, it's going to prove to be an excellent time to get a great deal on a property.
Keep an eye on those interest rates, though - they can really affect your purchasing power!
From MSN Money: http://blogs.moneycentral.msn.com/smarts
Basically, since the announcement of the government buyout of Fannie Mae and Freddie Mac, rates on mortgage loans dropped dramatically. Bankrate has this to say about it:
Mortgage rates fell because investors went on a buying spree Monday for mortgage-backed securities, or MBSs. That caused the prices for these bond-like financial instruments to rise -- and when bond prices rise, yields fall. Mortgage rates followed yields downward.
Now, only time will tell whether the rates will continue to stay lower or not. Lending standards are still fairly tight, and I highly recommend getting pre-approved by a lender prior to beginning any house search, HOWEVER, the advantage this brings is that when mortgage rates drop, affordability rises.
Think of it this way, the higher the mortgage rate, the higher your payment on the same property. Likewise, if you consider that you can afford $X dollars per month and no more, then when mortgage rates drop, you can afford more house for the same payment.
Assuming that rates stay low - and there's no guarantee that they will - then this fall will be a great time to purchase property. As we get closer to the holidays, more and more buyers drop off the radar, figuring they'll start again next spring. This is a historical trend, as spring is considered the "hottest" time for the real estate market, with the most sales taking place. As a buyer searching for a great deal on property, then, obviously the best times to buy are when there is minimal competition from other buyers, and when hungry sellers abound. Though it may seem counterintuitive from a convenience standpoint, one of the best times to get a great deal on a home is going to be smack in the middle of the holiday season.
After Halloween, buyer activity will really begin to slow down, and pretty much tank in the period between Thanksgiving and New Years Day. Last year, buyer activity dropped so low that experts were suggesting that we may have reached "inherent demand" That is, only the people who absolutely had to buy and sell (death, divorce, job moves, etc.) were doing so. There are a few factors in play this year that may or may not prevent sales from getting as slow as last year, but regardless, it's going to prove to be an excellent time to get a great deal on a property.
Keep an eye on those interest rates, though - they can really affect your purchasing power!
