T he new year may have some interesting things in store for the real estate market. Tax credits for buyers are set to expire, rates are expected to rise, and more foreclosures will hit the market. What does this mean for you? Below are some of the expected trends. Follow the link for more in-depth explanation and more trends...
1 Still a buyers' market
2 More buyers entering the market
3 More foreclosures to come
4 Stabilizing home prices, in some places
5 Lending standards still tight
|
Rates May Soon Be on the Rise
|
In addition to the first time home buyer tax credit expiring this spring, another form of
stimulus will soon disappear, as the Federal Reserve winds down a program that
has been keeping home loan rates artificially low. The fact is that the lowest
rates of 2009 were driven down to their attractive levels because of the Fed's
Mortgage Backed Securities (MBS) purchase program. The Fed has already used
over 80% of the allocated funds for MBS, meaning less than 20% remains to be
used over four months.
 As the Fed's program winds down and ends, we'll likely see two things happen.
First, we will probably see higher levels of volatility-with rates sometimes
shifting dramatically in the middle of the day. Second, since MBS will have
less support from the Fed, rates are likely to rise over time. If you would like more information about upcoming changes in the lending industry, you may email Deb Still at Golf Savings Bank: dstill@golfsavingsbank.com.
|
