Buyers have been saying for 6 months or more "I'm going to hold off on buying until the bottom hits". Guess what, the bottom has come and gone. While there are still countless motivated sellers who will make a deal, the buyer has to initiate the deal! And while the buyers have been waiting for the sky to fall, the mortgage market has been changing your plans and you may not be paying attention!
Lenders and the two major providers of mortgage money-Fannie Mae and Freddie Mac have been rewriting programs, guidelines and standards, making it tougher to qualify for a mortgage, as well as more expensive.
Many home buyers and consumers I hear from have totally confused the fed rate cuts with the expectation of lower mortgage rates. The opposite is true. While the lower short term borrowing rates help revolving credit and may stimulate spending, they stimulate the stock market. Those 200 and 400 point gains recently have a negative effect on the bond market which is where the mortgage market does it's business! So while you've been waiting for the bottom to fall out, mortgage rates went up 1/2 a point or more in the last few months, but more importantly the qualifying rules have drastically changed. So now you may not be able to afford the same house you could have 4 months ago. Do you want to take that chance to see what's going to happen next week?
But don't think you can't or shouldn't buy a house! You just may have to look at a slightly lower priced house. The good news is there are plenty of homes on the market here in Williamsburg Virginia and the surrounding area.
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