[Samba] Lloyd Segal
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Wed May 29 08:57:36 MDT 2013
Lloyd Segal Real Estate News
15-year mortgage rate hits record low
Mortgage rates dropped again this week, with the 15-year fixed-rate loan
hitting a record low, according to a report from mortgage financier
The 15-year fixed rate fell to 2.56% from 2.61%. A year ago, it stood at 3.07.
The most popular mortgage, the 30-year fixed rate, came in at 3.35%, a
drop of 0.05 percentage point and only 0.04 percentage point above its
record low set the week of November 21, 2012.
The rates provide a welcome boost to the housing market and to the
overall economy, according to Frank Nothaft, Freddie Mac's chief
"Residential fixed investment added to overall economic growth over the
past eight consecutive quarters and contributed more than 0.3 percentage
points in growth over the first three months of this year," he said.
"[N]ear record low mortgage rates should further drive the housing
market recovery over the near term."
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Buying a House When Inventory Is Tight
As the housing market continues its recovery, prospective home buyers in
some areas may have found, much to their dismay, that the inventory of
houses for sale is somewhat limited, and sellers are receiving multiple
A recent analysis by the real estate site Zillow, for instance, found
that while some improvement has occurred, the inventory of homes for
sale nationally in April was down about 14 percent from the same time
The National Association of Realtors, meanwhile, also reported a
decrease in inventory in many markets compared with a year ago. Some
markets saw drops of 20 percent or more, indicating “near record lows”
of available homes.
Specifics vary by market, of course, and there are also some signs that
the lack of inventory is easing this spring, as home values have risen,
Zillow found. Rising values bring more sellers off the sidelines,
putting more homes on the market. Many owners have been waiting to sell
because their homes are still “underwater,” or worth less than their
Mark Cenci, broker with ERA Martin & Associates in Chillicothe,
Ohio, said buyers need to be aware that the market is changing.
Sometimes home shoppers are confused, he said, because there appear to
be a lot of houses listed for sale, but many are actually under
“They think there’s plenty of houses, and that they can find what they
want and get a great price,” he said. But that’s not necessarily the
So what should a home shopper do, in a market where inventories are tight, and there may be competition for some homes?
Mr. Cenci recommended that if you are eager to buy and have found a home
you really want, you make your offer as strong as possible — even if
that means going a bit above the asking price. If you have time to shop
around, you can be a bit more aggressive — that is, lower — in your
offer. But, “If they need to move and they find house they love, they
shouldn’t be afraid to make a good offer,” he said.
Another way to show a buyer that you are serious, and to set your offer
apart from other buyers’, is to increase the amount of earnest money you
put up with your offer. The money goes toward your down payment if
your offer is accepted, and is returned to you if the seller declines
your offer. (Of course, if your offer is accepted and you back out, you
lose your earnest money. So again, it makes sense to up the ante only if
you’re confident that you want the house.)
If you think there’s a chance you won’t go through with the purchase, he
said, save everyone a lot of time and “don’t make the offer.”
It also makes sense to consider the type of mortgage you will use,
according to ERA. While some buyers are attracted to F.H.A. loans
because they typically require lower down payments, a conventional
mortgage may be more attractive to a seller. That’s because the
requirements for the condition of the property are often tougher for
F.H.A. loans, so some sellers may be wary of being asked to make repairs
before the sale can proceed. If you can swing a higher down payment, a
conventional mortgage may help your offer.
In general, limiting the number of contingencies in your offer — whether
they are related to financing, inspections or other conditions — will
strengthen your offer, he said.
Are you in the market for a home? Have you had difficulty finding a house, or encountered competition for your chosen property?
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