Mortgage Rate News

Janet Yellen, the president of the San Francisco Federal Reserve, has said that housing markets have “hit the skids” since the days of easy credit and booming home sales. Finally, years of easy money and easy mortgage financing requirements have caught up with the markets. Housing relief bills and other government measures may not be enough. Calculated Risk reports on some of Yellen’s comments about housing markets:

Since then, housing markets have “hit the skids.” In inflation-adjusted terms, residential construction fell by 13 percent in 2006 and by 14 percent in the first half of last year. Of course, once the financial shock hit last summer, things got even worse, with real residential construction dropping at a 24 percent rate on average since then. And, indicators of conditions in housing markets are pointing lower for the future. Housing starts and permits as well as sales are trending down, and inventories of unsold homes remain at very high levels. These inventories will need to be worked off before construction can begin to rebound.

Indeed, with housing markets showing increased inventory, it is no surprise that home prices are down quite a bit as sellers try to do what they can to sell their homes. Also contributing to the lower home prices overall are the foreclosures. These are sold at low prices so that mortgage lenders do not have to sit on them.

If you are savvy with your decisions, and if you have the credit score and down payment to make it possible, you can probably not only get a good deal when you buy a home, but you could also get a good deal on a home mortgage loan. Now might be a good time to invest in real estate.

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Janet Yellen, mortgage lenders, invest real estate