Hidden Amongst the Doom and Gloom, Signs of Hope for Housing in 2009
January 5, 2009
I have three words for you – mortgage interest rates. This item has offered a glimmer of life amid the constant bombardment of painful and negative news about the economy and housing market. The central entities directly impacting mortgage interest rates are Capitol Hill and in particular the Federal Reserve. The Fed is taking an unprecedented commitment to restore the credit markets and promote an economic recovery.
In December of 2008, the Fed performed two moves. They dropped its target rate to close to zero and committed to buying quantities of bad mortgage securities. These two moves are starting to have positive signs to the functionality of the market. The most obvious over the last month has been the impact to mortgage interest rates.
Mortgage interest rates have fallen sharply. Fixed rates have dropped over a percentage point since mid-November. This has unleashed a refinancing wave. Many of the people taking advantage of the lower rates are those individuals with at least 20% equity in their home. In addition to all the refinancing, the lower interest rates are pushing buyers to get more serious about purchasing new and resale homes. Our specific experience with the impact is that open houses have been more productive, calls are coming in from buyers that they are ready to start looking more seriously for homes and in some areas well-priced homes are moving off the market at a quicker rate.
This may be a small step amongst all the doom and gloom, but it is a step in the right direction.
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Everyday, struggling homeowners call foreclosure and loan mitigation hotlines for help on how to save their homes. This is just a small sample of a larger problem. Foreclosures, short sales, adjustable mortgages, and financial or personal hardship have wreaked havoc in the marketplace. The need for loan mitigation is paramount.
At Loan Mitigation Advocatessm, we encourage homeowners to try and resolve their situation themselves. In many cases, the homeowner realizes the complexity of the situation and that they do not have the time, connections within the lending industry or negotiation power. This is where many homeowners turn to a loan mitigation advocate. The hiring of a specialist to handle the process from start to finish can ease an already stressed situation, reaping benefits long into the future, and most importantly, help you, the homeowner, stay in your home.
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