New Home Sales Climb + Record Interest Rate Lows

Great News!!!

It's really nice to finally hear some good news on the home front. Sales of new single-family homes jumped 4.7 percent from January to February, the Commerce Department reported today. And interest rates are hitting all time lows since 1971.
But...Better compared to what?

What you are NOT hearing is that there is STILL a lot of volatility in the market. Now you may be aware of this but it's important to keep that in perspective and definitely within your focus, especially when you are advising your clients on the right steps to take over the next few years. I couldn't believe it, this morning on one of the major news channels, I actually heard the newscaster say that interest rates hit an all time low today of 4.375%! I couldn't believe what I was hearing. Over the last 2 days interest rates have gone up .125% each day and 2 days ago we were on average at 4.75% for a conforming 30 year fixed loan, $417,000 or less. Take care who you get your information from.

So how does the volatility play out?...

A FEW STATES - 50% of the foreclosure action that took place last month on nearly 291,000 troubled properties nationwide occurred in just 3 states. And guess who is in the top 3? That's right California along with Florida and Arizona (source: RealtyTrac).

While the unexpected increase in home sales and interest rates dropping was welcomed by many including the financial markets, sales of new homes were down 41% from a year ago. February's numbers were the second worst on record, surpassed only by January's annual sales rate of 322,000 homes..

So, although this is good news, in reality, we're really just bouncing off the lows and we have a ways to go. It's important to always be prepared for the worst so that you and your clients aren't taken by surprise.

You can always count on us to provide you and your clients w up to date and insightful market views on real estate and mortgages. So keep checking back for more...