Friday, August 05, 2011

Well, with the stock market and general economy going the way they have this week, it is still very interesting to see what benefits may yet exist for home buyers and sellers. When the Dow Jones indicator dropped over 500 points on Thursday, its worst single day in over three years, everybody thought that it was the latest end of the world scenario. Well, N O T S O F A S T! Aside form the fact that there will be, likely sooner rather than later, a market recovery (only question is how soon), there was an immediate positive result for home buyers (and as a result for sellers too!). Mortgage rates dropped--make that PLUMMETED! They hit all time record levels. Why, you ask. It's actually very simple. When securities markets sink like the proverbial rock in the ocean, investors exit the market en masse seeking a safer harbor for their money. Even with the recently band-aided debt crisis/debt limit settlement in Washington, that safe haven is US Treasuries, which, just happen to be the main rate base foundation for most mortgage rates. With all of these investors diving into Treasuries, that pushes the prices of said securities up. When a debt security rises in value, its yield drops, in this case faster than aforementioned rock. The rates yesterday for 30 year fixed rate loans dropped to 4.39%, down from the prior week's 4.55%. If that isn't enough to get you running out and buying a home, then try this on for size: 15 year fixed loans hit an all-time low rate of 3.50%. Now, it's obvious what this does to help buyers out. However, with all these newly excited buyers running around, don't you think that it will help you buyers as well? If your home is ready to go, priced reasonably and on the market, you have a much better chance of not only selling, but receiving your requested price--because buyers can better afford it now! Don't wait! Buyer or seller--this is NOT the time to sit by. Get in on this opportunity!


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