The Birmingham mortgage market, like the rest of the nation, shows rates continuing to hover in a tight range over the last few weeks due mostly to subpar economic data. Last week, the Fed held the Fed Funds rate steady and the Consumer Price Index (CPI) showed no real threat of inflation. Also last week, housing starts were down 6% and the Dow rose to a new high for the year. Yesterday, Existing Home 
Sales for February was reported weaker than projected. Today, New Home Sales was reported weaker than expected. Durable goods orders were stable showing growth for the second month in a row. On Friday, Consumer Sentiment and revised GDP numbers will be released.
A wild card as far as rates continues to be the conclusion (i.e., END) of the federal $1.25 billion mortgage backed securities (MBS) purchase program. This program has been in place for a while and has helped keep interest rates low through this special government program by keeping demand for MBS securities artificially high. Higher demand means higher prices for bonds and, as a result, a lower yield (interest rate). Bond prices and yields (rates) move in opposite directions. There is some concern that at the conclusion of this program at the end of March rates will steadily begin to rise to reflect the change in supply - demand dynamics.
With the federal homebuyer tax credit expiring at the end of April, continued excess inventory of homes to sell, rock bottom prices and the peak season upon us, NOW is the best time to buy! If you are considering selling, the peak selling months of March - June are here so don't hesitate to act now if you are thinking about making a move. When the tax credits are gone and interest rates begin to rise, it is unclear as to what will happen to housing demand, especially later in the year during the Fall and early Winter months. If you would like free property links sent directly to your inbox on a daily, weekly or monthly basis, click MLS or email me at sold@markcrain.com the areas and features you are interested in and I will set up a customized search. For a brief overview of the federal tax credit, click tax credit.
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