There is a lot of interesting news concerning mortgage interest rates and home sales. While the end of the tax credits on April 30th was considered by many to be the beginning of a slowdown in home sales, many areas are still reporting new contracts and increased interest from buyers.
Part of the reason is the drop that week to lows for the year in interest rates. One report showed that Freddie Mac dropped the 30 year fixed rate down to 4.93 percent, and the one year adjustable rate to 4.02 percent. The recent uptick in consumer confidence is a contributor to home purchase interest, as well as bargain prices influenced by foreclosure inventories. Some markets are experiencing double-digit percentage increases in April home purchase contracts over April a year ago. The National Association of Realtors reported that year-over-year housing prices rose in March in 91 of 151 metropolitan areas.
While those are the “glass half full” reports, there are still troubling factors in play. Even though foreclosures are slowing, April was still a record month. As long as foreclosures keep downward pressure on sale prices, more homeowners will slip farther into negative equity territory. There is fear that this will encourage them to walk away from mortgages they can otherwise afford.
So, whether you are looking at a glass half full, or the other way around, it’s turning into an interesting year for news in the housing markets.