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Price Is How Much You Pay

NY Times reporter, David Leonhardt, shares some interesting insight on the connection (or disconnect) between Mortgage Rates and Home Prices.

...
It’s not easy to see much of a relationship.
...
My best guess for why the two don’t correlate more closely is the role that psychology plays in housing markets. Prices just don’t move as quickly as economic theory suggests they should.

Not really, David.

The market, for all it's recent folly, is a generally rational experience. And buyers, for all the talk of the "emotional purchase", make rational distinctions.  For instance: The price is how much I pay for a house. The interest rate is how much I pay for financing.

In today's REO (bank owned) driven market -- many buyers pay cash. Would a cash buyer pay more because interest...

The Perfect Storm

Spring is here.

I know it sounds silly coming to you on a rainy day in early February when it's 35 degrees outside and "wintery mix" is the weekend forecast, but the real estate market is on strange footing these days.

Here's A Fact:

Spring has sprung in the real estate market.

And the next 3 months are the best opportunity to get your home sold in over a year.

Why?

Several factors are creating a "perfect storm" for sellers in the current market.

I'll do my best to explain...

Wikipedia defines a "Perfect Storm" as an "expression that describes an event where a rare combination of circumstances will aggravate a situation drastically."

It's also a movie starring George Clooney as the captain of an ill-fated fishing boat.

But the perfect storm I'm talking about is a good one.  No sinking ships here.

And...

What's Up With FHA?

FHA announced this week it will seek to implement changes to current policies.  These changes are all restrictive and have a significant impact on the real estate buying public.  

You can read all about the changes here: FHA Announces Policy Changes to Address Risk and Strengthen Finances 

For those less inclined to sift through all the beauracracy ... here's a quick snapshot:

  • The upfront mortgage insurance premium will increase by 0.5% from 1.75% to 2.25%
  • The maximum seller concessions will decrease from 6% of the sales price to 3% of the sales price
  • There are some credit score/LTV limitations that should not affect “A” paper lenders

When Do The Changes Go Into Effect?

FHA will issue a notice and have a comment period on most...

It's So Hard To Say Goodbye To Yesterday

If you've been following mortgage rates over the last month you've likely noticed a quick and steady climb.  In fact, since a low of 4.5% on November 27th, 2009 to around 5.25% today (December 30th, 2009) they've done nothing but go up. 

What's Going On?

Mortage rates are going up.  And this rise in mortgage rates is something I've been expecting for a few months now.  Mortgage rates are on their way up, likely to 6% or more over the next few months

Why Is This Happening?

Because that's what they were about a year ago (and where they would be today) before unprecedented intervention by the Federal Reserve.  It's not the result of the economy is recovering ... the economy isn't in recovery mode.   Last year the Federal Reserve...

How to Find the Best Atlanta Mortgage

Banks vs. Mortgage Brokers

If you're in the market to buy a home...likely, you're also in the market to find the right mortgage to finance that home.  It's important to know there are huge variations between mortgage brokers and bank loan officers.

Atlanta Bank Loan Officers

Loan officers at a credit union, bank or large lending houses (ie. Wells Fargo, Bank of America) are employed by those institutions and, hence, work to sell the loan and mortgage products offered by their employer.  Many of these institutions have a large selection of loan types to select from but it's important to note that all of those loans "originate" from one source.

Atlanta Mortgage Brokers

Much like real estate agents, mortgage brokers act a "freelance" agents who are paid an origination fee to broker loans between hundreds of lenders across the nation.  

One way to think about a mortgage broker is as a "scout".  They seek...

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