Mortgage Applications Up With Lower Rates: Are The Fence Sitters Moving?

With the new year arriving, lower interest rates, and sellers more willing to negotiate, there has been a boost of activity in the real estate market. December and January are typically slow, but the new activity has experts wondering if the market has seen the bottom.

I doubt that this is the bottom on a national scale, but I think there is a great deal of pent up demand. Nobody wants to be the one who bought at the top, or even as the market starts heading down. We all want to be the genius who bought as the market hit the bottom and is heading up. So instead of a normal flow of home sales, we are seeing a huge backlog developing of potential homeowners who are sitting on the fence.

I think we saw the early adaptors start jumping off the fence.

The recent decline in rates has been relatively small, and there is still concern that the slump will worsen in the spring when more homes come on the market. But the low rates, real estate and mortgage brokers say, have still provided a significant boost to their business, which had dropped significantly from 2005, the best year for home sales in history.
Lower rates get “them off the fence,” said Tom Carlson, an agent at Pacific Union GMAC Real Estate in San Francisco. “There’s a sense of urgency that mortgage rates probably will rise.”
The national average for a 30-year fixed-rate mortgage is now 6.04 percent, after peaking at 6.8 percent in late June, according to Bankrate. (These rates are averages for what consumers can expect to pay nationally for conventional home loans.)
Mortgage applications, while they are some distance from their peak during the housing boom a year ago, surged 30 percent in early December from their summer lows as buyers took advantage of falling prices and low rates to buy homes before the holidays. via the New York Times.

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