October Home Sales Surge! Good News for Refinancing Homeowners?
Home sales surged for the second month in a row in October, reaching the highest level in 2.5 years. This nationwide sales event marks a 36 percent increase from the housing market bottom in January.
These beefy numbers are being attributed to first-time homebuyers scurrying to take advantage of historic low mortgage rates, cheap home prices, and to beat the clock on the November expiration of the homebuyer tax credit (the government has since extended the tax credit to April 30 for first-time homebuyers and even added a tax credit for existing homeowners).
In a sobering note on housing, the Wall Street Journal had an article yesterday morning, noting that 23 percent of homeowners owe more on their house than the house is worth. Some states are in especially bad shape with Nevada (65%), Arizona (48%), Florida (45%), Michigan (37%), and California (35%) leading the pack.
So, October’s surge in home sales means that home values will be going up and refinancing homeowners can get a bump in their home’s equity value, right? Well, not exactly, as home values have done little but tread water during the past couple months of solid home sales numbers. People and investors are buying up foreclosed and distressed sale homes at bargain basement prices, so overall home value is staying even at best.
The real question is where home sales and home values will go from here and into 2010. Many in the industry are calling for further home price declines into the spring as homebuyers hibernate during the winter in light of the homebuyer tax credit extension.
Another concern for the housing market is twofold. First, there are a glut of foreclosed homes on the sidelines ready to hit the market. Secondly, job losses are pushing once creditworthy homeowners into default. Borrowers with prime, fixed-rate loans accounted for one in three new foreclosures in the second quarter, the Mortgage Bankers Association said last week. Nationwide, a record 14 percent of homeowners with a mortgage were either behind on their payments or in foreclosure.
So, as you can see, the October Homes Sales Surge feels all warm and toasty to those reading the headlines, but the undercurrent is still a muddied mess.
What does all this home sales and home value stuff mean to refinancing homeowners you might ask? Good question! It means that what you think your home is worth, and what it will actually appraise at could be two very different figures. Since home value directly affects the borrower’s Loan-to-Value (LTV) ratio, which in turn impacts qualifying mortgage interest rates, refinance program options, and home loan program acceptance/denial, it means a lot.
If I have said it once, I’ve said it a million times (and probably have), that refinancing homeowners should do their best in coming to a “realistic” value for their home in the current market during the pre-qualification stage of their home refinance. Yes, that is easier said than done, but at least check online at some of the free home eppraisal sites such as Zillow.com. You can take the online values given with a grain of salt, but at least you will have an idea of what your home may be valued at, and you can cross reference your home against similar and recently sold homes in your area.
Refinance mortgage rates are frightfully low at the moment, so you want to take advantage. Just don’t go into it with your eyes closed. For qualified borrowers with solid home values and adequate equity, it’s a great time to take advantage!
If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.
May the Mortgage Refinance Rates be with You!
Refinance Tool Box
These beefy numbers are being attributed to first-time homebuyers scurrying to take advantage of historic low mortgage rates, cheap home prices, and to beat the clock on the November expiration of the homebuyer tax credit (the government has since extended the tax credit to April 30 for first-time homebuyers and even added a tax credit for existing homeowners).
In a sobering note on housing, the Wall Street Journal had an article yesterday morning, noting that 23 percent of homeowners owe more on their house than the house is worth. Some states are in especially bad shape with Nevada (65%), Arizona (48%), Florida (45%), Michigan (37%), and California (35%) leading the pack.
So, October’s surge in home sales means that home values will be going up and refinancing homeowners can get a bump in their home’s equity value, right? Well, not exactly, as home values have done little but tread water during the past couple months of solid home sales numbers. People and investors are buying up foreclosed and distressed sale homes at bargain basement prices, so overall home value is staying even at best.
The real question is where home sales and home values will go from here and into 2010. Many in the industry are calling for further home price declines into the spring as homebuyers hibernate during the winter in light of the homebuyer tax credit extension.
Another concern for the housing market is twofold. First, there are a glut of foreclosed homes on the sidelines ready to hit the market. Secondly, job losses are pushing once creditworthy homeowners into default. Borrowers with prime, fixed-rate loans accounted for one in three new foreclosures in the second quarter, the Mortgage Bankers Association said last week. Nationwide, a record 14 percent of homeowners with a mortgage were either behind on their payments or in foreclosure.
So, as you can see, the October Homes Sales Surge feels all warm and toasty to those reading the headlines, but the undercurrent is still a muddied mess.
What does all this home sales and home value stuff mean to refinancing homeowners you might ask? Good question! It means that what you think your home is worth, and what it will actually appraise at could be two very different figures. Since home value directly affects the borrower’s Loan-to-Value (LTV) ratio, which in turn impacts qualifying mortgage interest rates, refinance program options, and home loan program acceptance/denial, it means a lot.
If I have said it once, I’ve said it a million times (and probably have), that refinancing homeowners should do their best in coming to a “realistic” value for their home in the current market during the pre-qualification stage of their home refinance. Yes, that is easier said than done, but at least check online at some of the free home eppraisal sites such as Zillow.com. You can take the online values given with a grain of salt, but at least you will have an idea of what your home may be valued at, and you can cross reference your home against similar and recently sold homes in your area.
Refinance mortgage rates are frightfully low at the moment, so you want to take advantage. Just don’t go into it with your eyes closed. For qualified borrowers with solid home values and adequate equity, it’s a great time to take advantage!
If you are considering a refinance now and need some help, have questions, or need some competitive rate quotes, please check out the popular Refinance Tool Box. Just give a call at 888-850-9888 or fill out a Rate Quote Request online for professional assistance without the aggressive high-pressure sales tactics.
May the Mortgage Refinance Rates be with You!
Refinance Tool Box
Labels: economy, fha refinance, finance, home loans, money, mortgage rates, refinance, refinance rates, refinancing
posted by Jim Bisnett at
10:23 AM
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