Hellos and happy Friday!
Rates are up slightly today still in the low 4's for 30 year money. The FNMA 3.5% bond is off about 16 basis points again today trading at $99.44. Money is trending up for now.
I just read an article suggesting that Moody's is of the opinion that there will be an additional 8% drop in home prices.
What? I would be interested in hearing where they come up with that number. Yes, I agree that we may have some deterioration to go in many markets but some of the markets that were the MOST beat up over the last few years that are starting to show signs of recovery.
Unfortunately, when news like this comes over the wire, buyers grab onto the fence just a little bit harder and take their chances sitting there waiting for the "8% off" sale on the homes they are interested in. (Despite continued efforts to create a sense of uncertainty around where the rates could be when the "8% drop in values" happens.)
It just feels so arbitrary..."Uh, we need a number so why don't you close your eyes and reach into the hat on my desk" followed by an "okay, 8% decrease in value story coming right up."
The fact of the matter is that nobody really knows what comes next. We had no way of knowing that homes were going to appreciate for 10 years due to all the artificial addition of borrowers with the exotic mortgage products qualifying people who never would have or should have been qualified. We had no idea that the feds would start purchasing mortgage backed securities by the billions a week keeping rates low for so long. WE didn't know that investors would actually keep rates where they are from the number of countries experiencing a "debt crisis" or whatever the reason someone tries to pin on it.
The real truth is that if a person feels as though purchasing a home is right for them and they are excited about their rate and price: they WIN.
Remember the old cliche about a bird in your hand? We have an opportunity now. We have uncertainty "then".
Cheers,
Chad
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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com
