A few facts often overlooked by media reports
While it's true that the median price of an existing single-family home actually did drop by 1.4% in 2007, it's important to put this into context. Over the previous six years - the typical length of time an owner stays in one home - the median price has risen nearly 40 percent. Those owners just gave back just about two percentage points of that gain, still leaving them with a very handsome appreciation rate.
Mortgage interest rates today are hovering around 6 percent - about the same as they were 40 years ago. Interest rates on both fixed-rate and adjustable-rate mortgages have been trending down. Falling rates do not portend a recession.
Interest rates on jumbo loans, however, (those over the Fannie Mae and Freddie Mac loan limit) remain well above conventional mortgage rates. Therefore, it isn't surprising that the share of single-family homes selling for more than $500,000 (many of which would rely on jumbo loans) fell to 12.4 percent of transactions in December 2007, from 14.2 percent a year earlier. This could also account for some of thedrop in the median price last year.
...more to come tomorrow......
Information from the National Association of Realtors
2 comments:
The mortgage industry has tightened the screws, making it harder to get financing, absolutely.
But this is compared only to the last five years when a seeing eye dog could get a loan because it was considered a 'working' dog.
However, it is still easier to get a loan today than 10 years ago.
good point....thanks for reading this.
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