Eugene Loan Guy

The latest news from the housing market continues to be mixed but with some definite upbeat news. Yesterday, the government announced that existing home sales were higher than expected and higher than the month previously. Today the consumer confidence came in lower than was expected and lower than the month before. It is the consumer confidence that shows that people are willing to start making purchases, not just homes, but appliances, cars and other than staple items. The Fed continues to purchase mortgage backed securities and mortgage rates are dropping below 5% again for a 30 year fixed. Additionally, according to the Mortgage Market Guide, “Harris Private Bank in Chicago Jack Albin says ‘worst is over in housing market’ and that home prices on a national basis are at ‘fair value’ when gauged against the Consumer Price Index.”

What does all of this mean to those of us in the trenches? Well, if Mr. Albin is right, and the worst is over, we should start seeing a turn-around in housing prices in a fairly short time. If that happens, those that have been waiting for the bottom will realize they have missed it and jump back into the market. Again, if that happens, the demand for houses and loans will increase, driving up the prices of homes and the interest rate on mortgage loans.

Will this happen overnight? No. Will it all happen together? Doubtful. Will we have any warning that it is starting? That is what this is. Will there be one big push up? Don’t think so. Normally we should see a steady increase with blips up and down. However, this is not a normal time, so anything could happen. It has been my experience over the years that interest rates will jump up but filter down. We have been in the filtering mode for some time with occasional jumps.

My honest suggestion is that if you have been waiting to purchase a home due to fear or greed, you should seriously consider doing it now. If you have been waiting for that ideal interest rate to refinance your current loan, you should get on a rate watch list right now. You can fill one out on my Oregon page under Mortgage Rate Watch. We may or may not see additional reductions in rate, but if we do, I expect them to be temporary.