Helping Buyers and Sellers with North Texas Real-Estate

Dog Days of Summer!

The dog days of summer, the Romans associated the seasonal heat with the star Sirius also known as the “dog star” the brightest in the heavens during this time of the year. Here in North Texas, a mid-summer rain spell has cooled us off, however this will not last forever and the temperature will rise. Prices on homes are also increasing yet volume of available homes on the market is low. Buyers are out shopping but not as numerous as this past spring and early summer. What is going on in the housing market this summer?

The Feds until recently have been keeping the mortgage interest rates at historic low levels, hoping to revive the sluggish economy. They did this by purchasing 85 billion dollars of mortgage-backed securities and treasury bonds. This allowed lenders to sell loans at very low rates and recoup their money fast with high profits. The Feds recently cut back on buying those bonds and securities leaving the market to private buyers thus raising the interest rates. The market was especially hot this spring and early summer. Buyers bought and the price of homes began to increase. The Feds read this as a strengthening economy and it was however, they might have been too hasty in pulling the trigger.

Within 52 days, the rates increased from 3.29% to 4.5%. Four and a half percent is still an incredibly low-interest rate and rates are not expected to go over 5.5%, 2003 levels.  However, the strength the market had shown in the first quarter was a result of the low-interest rates and yes; rising home values, the combination spurred the market. In my opinion, the Feds should have held back and let the market and home prices continue to grow. With higher home prices, those who could not afford to sell could finally see relief and the low rates spurred the Buyers to buy.  This trend would have continued yet the rising rates have now sparked some doubt with Buyers. The housing market has slowed. The Feds hope Buyers will adjust to the higher rates and they will. Buyers will not be able to afford as much of a home and the rise in prices may begin to slow down. Why rock the boat just yet? I believe the market might have been too fragile to pull the plug. The Fed should have seen at least a year of strong growth before making this change.

The rise in the mortgage rate is a double-edged sword.  Buyers will pay more for a home although lenders will be making more money and decrease restrictions on who can qualify for a loan, opening the market to more Buyers. We will see how all of this works. In the meantime, Buyers are still out there and if you are considering listing, your home now is the time to do it before interest rates go higher. If you would like to see what is available in the North Texas market please visit my website at:  http://www.djlyons-realtor.com/

Join me on Facebook at https://www.facebook.com/djlyonstxrealtor

See ya down the road!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s