Thanks to the Federal Reserve's effots to reduce inner-bank lending rates to almost 0%, mortgage rates have gone down from 5.5% for a 30-year fixed rate loan in early December to 5.2% and even, in some cases, into the high 4% range (the lowest rates in 50 years). Many banks, including Wells Fargo and Wachovia, cut their prime rates as well. This translated to a 3/4% drop in interest on home equity loans and credit cards through these banks (from 4% to 3 1/4%). What does this mean for the housing market? Well, according to experts, a 1% drop in mortgage rates can easily increase resales by a half a million homes across the country. Even in a recession, many parts of the country are experiencing a huge demand for home buying, especially among first time homebuyers who are seeing lower interest rates and home prices that rival those in from four or five years ago. Buyers know that this is definitely the best time to buy. Even Detroit, one of the hardest hit areas economically speaking in recent years, has experienced a 47% increase in home sales compared with the same time period last year. The sales of REOs, bank-owned and foreclosed properties on the market have helped create a slow but steady turnaround in the real estate market in the past few months. To find out more about the Lake Havasu real estate market, please contact me. I'm always happy to help.
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