Real Estate Market Bulletin Blog

The latest news about the Massachusetts Housing Market
October 25, 2012

QE3 is Supposed to Help Housing, But Will it Cut Consumption?

Author: admin - Categories: Economic Indicators, Lending Rate, Mortgages, home sales trends, real estate trends - Tags: , , , ,

Low interest rates are good for housing, right?

The Federal Reserve moving billions of questionable mortgages off banks books, too, correct?  After all, isn’t it the uncertainty with the quality of mortgages acquired through CBOs and ongoing foreclosures that are keeping banks from risking more lending, and thus keeping housing sales depressed?

Don’t forget that housing depends as much on incomes and people’s willingness to consume.  An interested article from Reuters makes the case that QE3, by depressing interest rates, has actually served to depress consumption too given all of the people that rely on income from interest bearing investments like bonds or savings.

We tend to doubt that this has an effect on housing, however.  Most people that depend so much on interest bearing investments are going to be more conservative investors and thus likely close or in retirement - not necessarily the people who are about to trade up on a home or splurge on a new addition or pool.  Nevertheless, anything that affects overall consumption certainly may have an effect, but it will be less pronounced.

December 9, 2009

Mortgage Rates Still Low, But Ready to Move Up?

Author: admin - Categories: Lending Rate, MA Real Estate News, ma mortgage - Tags: , ,

As of the writing of the post, mortgage rates are as low as 4.625% for 30 year convential mortgages (where the buyer has excellent credit of course).  A few years ago, these rates would have stoked the real estate bubble further and invited criticism of easy money, but the fact that most lending activity continues to be primarily for refinancing (despite an overall increase of 8.5%) indicates that the housing market itself is still not healing.

The frozen housing market is one argument that rates will remain where they are (or possibly decline), however if other macroeconomic indicators continue to improve such as GDP or jobs (which has shown stabilization), expect the Federal Reserve to consider increasing the discount rate in early 2010, which will likely force mortgage rates up (by increasing the cost of borrowing to lenders).

We probably have at least 1 - 2 quarters before major movements in rates, but if you are considering purchasing a home or refinancing, start to plan it now!

May 22, 2009

Is it the Right Time to Buy?

Author: admin - Categories: Foreclosures, Lending Rate, Real Estate News, homeowners

The real estate market of today is an amalgamation of foreclosures, bank owned homes, and distressed sellers.  These circumstances have lead to unbelievable deals financially for those willing to make a quick decision and a commitment.  The market as it is now is inefficient and lacking order.  People who are buying are often seeking bargains meaning they’ll either pounce on the first and best deal they see out there, or they’re willing to wait a few months before swooping in for the purchase in a short sale process.  And still others prefer to take part in a chaotic bidding war for a bank-owned house being auctioned.  This leaves little room for the traditional, more relaxed methods of buying a house.  Buying houses on a whim is not everyone’s style however. 

There are several aspects artificially limiting the supply of residential property and at least temporarily bringing the housing market back to a more orderly, less chaotic fashion.  Some of these aspects include:

– New statutes requiring banks to engage in negotiations to work-it-out with homeowners before foreclosing
– The federal government asking for a voluntary cessation on foreclosures

– Borrowers filing lawsuits and bankruptcies

– The promise of bailout money for financially strapped borrowers.

 

Perhaps in response to these aspects, and perhaps not there has been a slowing of declining home prices and an increase in sales recently.  On top of that, interest rates on 30-year fixed loans remain extremely low.  And although unemployment is still increasing, median income appears to remain unchanged across the nation.

Overall, it is expected that market value of homes will continue to decline, but at a slower pace.  For the foreseeable future, the markets will be mixed, troubled and unpredictable.  In other words, don’t expect the current status quo to go away anytime soon.

Homeowners
Housing Market
Real Estate News

December 15, 2008

Credit Conditions Improving?

Author: admin - Categories: Economic Indicators, Lending Rate, real estate trends - Tags: , , , , , ,

The TED Spread - the difference between between interbank loan interest and short-term U.S. government “T-Bill” interest has declined to its lowest point in over a month.  This indicator is generally seen as a gauge of the overall risk that banks are willing to take - the lower the number, the less perceived risk for inter-bank loans and thus the easier loans are to obtain, in general.  Coupled with the Fed’s well publicized aggressive push to lower mortgage rates below 4.5% plus the expected rate cut augur well for improvement in the housing market early next year.


Mortgage Rates

November 6, 2008

New President-elect, Barack Obama, focus back on the economy

Author: admin - Categories: Boston Real Estate, Lending Rate, Mass Home Prices, Real Estate News, home sales trends, real estate trends

Now after the election the focus is now back on the weak economy and Obama’s next steps as President-elect. Since the $700 billion bank rescue plan was approved under Treasury Secretary Henry Paulson, Obama’s first priority is picking a new Treasure Secretary. Read more about the Election, Jobs, Economy, and Lending Rate on CNNMoney.com.