FSBO BLOG

Yesterdays report showed U.S. Home Prices Weaken according to the S&P/Case-Shiller Home Price Indices. When you consider that over 50% of all sales are foreclosed properties by banks and FNMA, it is no wonder the price index will fall. Ask any agent what there buyers are looking for and they will tell you a big pick in demand for lower priced/bank owned property. As soon as this inventory is worked through prices will jump, it just might take another twelve months.

Cheaper houses, near record-low mortgage rates and rising earnings are among the factors now helping underpin demand for real estate.  The housing affordability index shows a record high, all that is needed is confidence in the future.

(AP) — Builders are feeling pessimistic over the housing market’s prospects in the near future.

The National Association of Home Builders, a private trade association, says its reading of builder sentiment remained unchanged in December at 16. Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006. The index measuring foot traffic from prospective buyers slipped one point to 11.

At the same time single family home vacancy rates have risen 50% in the past 4 years according to the Census Bureau.

As long as there are bank owned, vacant properties that are dropping in value, both builder and homeowners will suffer. It is time for the banks and government to wake up!!

AP reports rates on fixed mortgages rose for the fourth straight week this week, hitting 4.61 percent.

Freddie Mac said that the average rate on a 30-year fixed loan increased sharply from last week’s rate. And it is well above the 4.17 percent rate hit a month ago — the lowest level on records dating back to 1971.

The average rate on a 15-year fixed loan rose to 3.96 percent. Rates hit 3.57 percent last month — the lowest level since 1991.

The higher the rates, more incentive banks have to make new mortgage loans. Unfortunately the buyer pays more, but at least they can get a loan.