Jun 10
10
According to Freddie Mac, mortgage interest rates are flirting with all time lows. For people with decent credit, a decent job, and some cash in the bank, that makes it a great time to consider your options. Your cost to borrow money is low, and that is certainly a factor to consider in the “rent vs own” debate. Low interest rates mean it’s also a good time to consult your financial adviser and a local Realtor about whether this might be a good time for investment property, or just upgrading your primary residence. Owning real estate is not for everybody, so please consider your situation and goals carefully, and ask for expert advice if you need it!
The reason that rates are low is that mortgage applications are down. In fact, applications have dropped 35% not over the last year, but just over the last 4 weeks! The mortgage industry depends on writing new loans as a source of income, so they are trying to entice you in with super-low rates. Be sure to read the fine print on mortgages as with all contracts. With the home buyer tax credit gone, demand for mortgages is down. I expect a bit of recovery to a “new normal” between current levels and levels from a year ago. The tax credit in some ways borrowed buyers from the future. As new buyers who weren’t able to move earlier enter the market, things should normalize.
The third shoe to drop is in fact undeniable good news. Foreclosure rates are steady. And while the Nevada rate is still a very high 1 in 79 households, that’s still a 16% decline from last year! Remember, that includes everything from Notice of Default to Auctioned On the Courthouse Steps to Bank Owned Listings. It even includes homes that have gotten Notices of Default from their Homeowner’s Associations. One last thing about this news. It ends with this statement:
“The housing market remains plagued by enormous excess supply,” wrote Goldman economist Sven Jari Stehn.
While that may be true nationwide, it is clearly not relevant to the Las Vegas Valley. Over the two years, available inventory has been cut in half locally. We actually have more Realtors than listings in the MLS right now! While I do suspect we have an overbuilding problem (or one in the making), the last thing we have locally is “enormous excess supply.”
