Oregon Mortgages

Housing Trend

First I’d like to start off by saying that the the January 2007 economic outlook was posted last week and it showed that there was a 11% decline in new home sales from November 2005 to November 2006. Now most of you might say “well hey, the housing market is on a downward spin.” I’d then also like to note that November 2005 was one of the highest Real Estate selling months in quite some time so of course its hard to have the “Best month” every month and if sales don’t outsell what they did the previous year then it does “decline” that by no means says that the housing market is sliding down. It is still alive and well and rates are still very low, yes there is more housing inventory on the market but that just gives you more options and leverage. That’s not such a bad thing.

Now for some more concerning news after reviewing some reports I’ll touch on the main points.

1. With energy prices falling this is expected to keep inflationary pressures to remain low.

2. Low inflation concerns should keep long term interest rates from spiking up and they are expected to stay below 6.5%.

3. More people are steering away from Adjustable Rate Mortgages (ARMs) and ARMs are expected to only hold 14% of the market share which is the lowest mark since 2001.

4. Freddie Mac is estimating that housing prices will rise 2.9% which is modest compared to the recent activity we’ve seen over the last few years. But sellers are offering more incentives such as paying a buyer’s closing costs. Yes, house prices will rise but that depends on that market in your area. Remember this is a national average.

In summary yes the housing market is “cooling off” a bit but like I say previously you can’t have the “best year” for housing every year. Eventually it has to cool off. Rates are going to stay relatively flat which will be good for people who are buying or people wanting to refinance out of their ARM.