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A
lot has changed in just the past 12 months and we see that across the board
with improved sales figures, stronger consumer confidence, rising prices in our
marketplace and continued ripe environment for economic growth. In fact, in
Denver there has been about a ten percent rise in home values over just the
past year and it’s projected to continue increasing in 2013 and beyond.
Fairway
Mortgage is our preferred lender and one of the reasons they are a fantastic
choice is because they are a broker lender – allowing added flexibility that
one does not experience when working with large firm lenders or small banks.
Here
is a snapshot of what is happening in the mortgage environment today:
Low Interest Rates
Around For a While Longer
The
Fed recently announced that interest rates would not be hiked up in the coming
months. Rather than placing an unrealistic cap on interest rates, they have
decided to keep the rate low or possibly lower than they already are until
inflation climbs pat 2.5% or the national unemployment rate falls to below
6.5%. This means that we can expect see low or lower interest rates until at
least the next few years.
Buying Power Still
Strong
With
the low prices that we are seeing in our marketplace, coupled with low interest
rates – buyers have a lot of buying power. But that could change. If prices in
our local Denver area continue to rise at the rate they have during the past
year, we may see rates rise to about the 4% level. Though still very low by
historic standards, that 1% could have an impact on buyers where they would
need to adjust their purchase price by 10% to accommodate the change. For this
reason, now is a great time to buy a home.
Drastic Changes
Possible for FHA Financing
Though
unconfirmed, there is talk that the Federal Housing Administration may change
their financing program to require Private Mortgage Insurance for the life of
the loan. Right now, borrowers are only required to pay the mortgage insurance
premium until there is 22% equity on the property. This could potentially
change a lot for the mortgage industry since this financing is among the most
popular choice for most borrowers with almost half of mortgages financed via
FHA. If it were to happen, we would expect conventional loans to appear more
attractive for most buyers.
~
Right
now, we are experiencing Low Inventory, Low Interest Rates and Low Prices; the
“Three L’s” that make this an ideal marketplace conducive to plenty of real
estate activity. Contact us today if you would like to get in on the action. We
look forward to making your real estate dreams become a reality!
