Thursday, January 8, 2009

All This Money and No One To Give It To

Photo by nomadic homemaker on Flickr.

Apparently what's wrong with the real estate market today is not so much the unwillingness of banks to loan money, but rather people's unwillingness to ask for it. There are billions of dollars that the FHA is trying to loan home buyer's, but people still aren't biting. With mortgage rates as low as they are, even if you can't afford a 20% down payment and have to pay PMI, the net payment is virtually equivalent to the 6%+ 30 year fixed rates of only a few months ago. And if you can afford the 20% down payment, most people are too scared to jump into the housing market and would rather sit on their cash rather than live in it.

Either way, you can't argue that home prices around the country are at their lowest levels in the past few years, with some case by case exceptions. If you are in the market, now is the time to kick it into high gear and start to seriously look. We are sitting on 5% 30 year fixed rates with no points today and those numbers are looking like they will come down even further. We have record low mortgage rates. We have record levels of housing inventory. We have record levels of foreclosures and bank owned properties and we still don't have people buying. It's amazing that the FHA is having such a tough time finding a home for all that money. - By special guest blogger Adam Steinhandler

Home Buyers Can Easily Find Money for Mortgages or Refinancing [KnowledgePlex]

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