Market Update

Is it Time to Get Off the Sidelines?

by Iyna Bort Caruso

Talk of boom times may be premature, yet real estate experts are cautiously optimistic, using terms that haven’t been part of the vernacular in a while. Opportunity is chief among them.

After a period of historic lows, the National Association of Home Builders predicts housing production will rebound by about 25% this year. And, and the National Association of Realtors (NAR) weighed in with more encouraging news. NAR Chief Economist Lawrence Yun expects homes sales to increase by at least 10% and home values to rise by 3% in 2010. The impact of homebuyers tax credits in the first half of the year and expected job gains in the second half will boost sales activity and reduce inventory.

Although the $8,000 tax credit stimulus is only for first-time homebuyers, expect the estimated 900,000 who will be taking advantage of the provision to create a trickle up effect, says Scott Street of Street Sotheby’s International Realty in Columbus, Ohio. “It takes time, but it’s absolutely working.” Beyond that are the still-low interest rates. Street is hopeful about the outlook for 2010 because of “the combination of these events, along with pent-up demand from those who’ve been waiting on the sidelines a couple of years and are now coming back into the market.”

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Can you still get a 5% mortgage?

by By Les Christie on March 24, 2010

NEW YORK (CNNMoney.com)

There's still time to get a 5% mortgage -- but the window is closing.

On April 1, the government will stop buying mortgage-related debt, which will send interest rates slowly higher.

Since November 2008 the Federal Reserve has snapped up $1.25 trillion worth of mortgage-backed securities -- essentially, people's mortgages bundled together and sold to investors.

The program has kept interest rates artificially low over the past year, with the price of a 30-year fixed-rate loan ranging between 4.93% and 5.09%, according to mortgage giant Freddie Mac.

That's about 0.4 percentage points lower than these loans would have been without the government's intervention, according to Jay Brinkmann, chief economist for the Mortgage Bankers Association.

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