Here is some good news regarding mortgage applications, finally! According to the Mortgage Bankers Association, mortgage applications rose 3.6% for the week ending June 27th, and that’s not all. Thanks, in part, to the prices of homes dropping (thank god) people are starting to get over the shell shock they suffered when the housing market crashed. Real estate appraisers are noting that they are starting to get much more business from home buyers wanting to know if the houses they are purchasing are being sold for fair market value, as opposed to the last several years, which saw most of their business geared toward appraising homes in order to discern the going rate to sell a house.
Shout hallelujah because a new day is dawning, and it is slowly starting to become a goldmine for home buyers. Now that being said, you still have to make sure you research the real estate market thoroughly, because it takes some time for prices to hit rock bottom. You also have to make sure you are dealing with reputable real estate agents who will negotiate the best deal for you, real estate appraisers who are on your side (not the sellers) and mortgage lenders who explain the details of your loan in language you can understand. And listen up, because mortgage applications weren’t the only things that went up.
Refinance applications accounted for 36.8% of total applications, compared with 36.3% a week earlier. This means current homeowners have been able to renegotiate their ever-rising loans with mortgage lenders to ones that are more stable. So, we have more people buying homes and more people who are going to be able to stay in the homes they bought during the height of the housing market bubble. This is also great news for people in neighborhoods that are experiencing an influx of foreclosures and people who are simply walking away from homes they can’t afford. When you start to see abandoned homes peppered throughout a neighborhood, you start to see a decline in value.
So why all this encouraging news…well there are several reasons for it. For starters fixed-rate mortgages went down; for example a traditional 30-year fixed-rate mortgage fell to 6.33% from 6.39% the week before. More people are able to refinance because the 15-year fixed-rate mortgage fell to 5.9% from 5.95%. I know, you may be saying to yourself, “but that’s much higher than those interest rates during the peak of the housing market.” Yes they are, but guess what…those interest rates were unrealistic, they were variable rates, which means once they started to rise, your mortgage could double or triple and they helped cause the over-inflation of home prices. Real estate appraisers in Los Angeles were reporting values at no less than $500,000, and that was for your typical starter home!
So what does all this mean? Well it means it is the era of the home buyer. While you may not be able to make millions flipping homes now, you can move yourself and your family into that home you’ve always dreamed of. But keep this in mind; you should always have reputable real estate professionals on your side. A real estate agent will help you navigate your way through the best deals and neighborhoods, an appraiser will help you understand the fair market value of the home you are buying and a good mortgage lender will get you the best deal.
Your new home is out there, so go and find it.
If you are looking to purchase, sell or refinance a home, please visit us at www.iappraiseforyou.com for all your appraisal needs