Forbes Offers Encouragement in Housing Market

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Mortgage and Lending with Equity Resources NMLS 67179 Licensed in NC

Future's so BrightThere's been some speculation that the FED exit of the Mortgage Backed Security Market will cause a spike in Interest Rates, and a downturn in the housing market... not so says Forbes Magazine.  According to article, the exit of the FED is not going to HELP the Housing Market... but they point to encouraging signs that should keep us from going into that dreaded second dip.

 

  1. The FED is not likely to SELL all of those Mortgage Backed Securities anytime soon.  The sale will likely be the next thing that causes mortgage rates to SPIKE.  We've had a 1/4 to 3/8 rise in rates since the end of March (when the Fed stopped buying mortgages)... and we would likely see another 1/2 increase in rates (at least) if they began dumping them on the Bond Market.  There are several large sales this week, so we'll see if this theory holds. (Click here for FOMC Meeting Notes)
  2. The Foreclosures are Coming!  The Foreclosures are Coming!  As noted by CNBC yesterday, there's a massive number of foreclosures hitting the market in April (near end of month) and these homes will require new financing... meaning this should increase the number of sales (I get fuzzy on this line of thinking) should go up 10% year over year because of the number of foreclosures on the market.
  3. Home Depot is Hiring!  This must mean that people are fixing houses, and spending money on the houses - so this is GOOD NEWS!  Right?  Creates jobs, creates more orders for windows and siding and air conditioners!

 

Again, I don't know about all of this theory - but I DO KNOW this...

The Triangle is growing so fast that it could eclipse Mecklenburg County (Charlotte) as the County with the largest population in North Carolina.  Charlotte has looong been the biggest magnet - and that switch to Raleigh only helps our housing picture.  We never had the huge "highs" of other markets, we never had the huge LOWS that other market had... and I believe NOW is the time to buy in the Triangle!

If you are considering a purchase in North Carolina, or want information about USDA Home Financing (or the best mortgage interest rates around) call Steve and Eleanor Thorne, FFSi - a North Carolina Mortgage Banker. 919-649-5058

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Rainmaker
1,570,124
David Saks
(retired) - Memphis, TN

Even though the FED stepped in to pick up MBS packages for pennies on the dollar, as long as there are few private individual investors working the secondary market the banks will find it tougher to replenish the funds they need to close loans. Hence, I'm not so sure that I would buy Forbe's prediction too quickly. It's much more difficult to get a loan for a home today because of the failed secondary market, among other things, as we all know.

Apr 07, 2010 05:38 AM #1
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Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Eleanor, I keep praying that things are going to pick up but what I'm seeing are fence sitters. Keeps me too nervous.

Apr 07, 2010 07:32 AM #2
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Lee & Pamela St. Peter
Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522 - Raleigh, NC
Making Connections to Success in Real Estate

Eleanor how right you are!  You do a great job putting things into proper perspective!

Apr 07, 2010 11:12 AM #3
Rainmaker
1,099,076
Al Raymondi
Ocean View Realty Group in Ormond By The Sea Florida - Ormond Beach, FL
Ormond By The Sea Florida - Home and Condo Sales

A "massive" volume of foreclosures will increase the sales numbers and put additional downward pressure on values.  I believe the housing market will have a tougher time getting back to "normal" as long as there are significant numbers of foreclosures coming through the system.  Better or worse, we need to get through this to move forward.

Apr 08, 2010 12:02 PM #4
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1~Judi Barrett
Integrity Real Estate Services 118 SE AVE N, Idabel, OK 74745 - Idabel, OK
BS Ed, Integrity Real Estate Services -IDABEL OK

Eleanor,

This sounds very familiar... our area has not had the big bubble nor has the bubble burst... no huge highs and no deep lows.  We are fairly stable.. Unemployment is higher and the banks are tough...

Foreclosures, foreclosures, foreclosures...one of these days, the nation will work through them... hopefully.

Apr 08, 2010 02:53 PM #5
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Eleanor Thorne

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