Birmingham AL Mortgage Market

The Birmingham AL mortgage market continues to hold steady with increased purchase volumes being offset by decreased refinance activity.  Given March's home sales strength locally, which enjoyed a 14% gain over the prior year (i.e., from March 2009 to March 2010), coupled with continued good news nationally regarding the economy, the Birmingham AL mortgage market will hopefully continue to see low rates and healthy activity.

With the expiration of the federal homebuyer tax credits just 14 days away, there has been some concern that purchase volumes will decrease substantially in May, June and into the summer.  Coupled with a strengthening economy and expected upward inflationary pressure along with the expiration of the federal government's mortgage-backed securities (MBS) purchase program, concern has been pretty widespread that rates could rise rather significantly over the course of the next 3-6 months.  Given Wednesday's CPI report which showed no real threat of inflation and demand for MBS's very strong, rates have remained in the low 5's for 30 year fixed rate mortgages.  Given this past week's positive reports on retail sales (up) and new housing starts (up), it seems the Birmingham AL mortgage market is experiencing the best of both worlds as the economy strengthens without inflationary pressure for the time being.  The current environment of low rates and low housing prices is ideal for buyers as we are probably at the bottom of the curve on rates and housing prices.

The Birmingham AL mortgage market will need continued good news and strong home sales in April to withstand expected decreases in demand in May and June from the expiration of the federal homebuyer tax credits and continued decreases in refinances.  In my opinion, there is a strong sense of urgency in the market right now that will yield a big wave of real estate sales activity that will drop significantly next month.  In order to sustain a reasonable level of sales activity in the coming months, interest rates will need to remain below 5.50% for as long as possible.  Otherwise, if rates begin to rise sooner rather than later, this current buyer's market could become even more unbalanced, creating even more heartache for sellers (and seller's agents). 

To search for any listed home currently available for sale in the greater Birmingham area, click MLS.  Contact me at sold@markcrain.com and I can set up a weekly or monthly email update of homes available for sale in your area or according to your criteria (e.g., by school district, #bedrooms, area, etc...).  For more detailed information on rates, loan programs or to get prequalified, contact Jimmy Kernan, Vice President and Loan Officer with Regions Mortgage at james.kernan@regions.com.  Regions has a complete line of mortgage products including conventional, FHA / VA, Jumbo and USDA rural development.