1-10 Mortgage rates on 30-year loans fall to 5.09 percent :: The Construction Management Pro

1-10 Mortgage rates on 30-year loans fall to 5.09 percent

The Federal Reserve’s program to buy securities backed by mortgages will end at about the same time as the Home buyer tax credit. If the employment numbers don’t get much better, we could see another decline in home sales! One number to watch is what is going on in the commercial real estate market. If we see continued increase in commercial vacancies, then employment is not expanding and companies are not adding jobs. See Article in Asbury Park Press

Contract activity for pending home sales fell after a surge of activity in preceding months to beat the original deadline for the first-time home buyer tax credit but remains comfortably above a year ago, according to the National Association of Realtors. Lawrence Yun, NAR chief economist, said a drop was expected. “It will be at least early spring before we see notable gains in sales activity as home buyers respond to the recently extended and expanded tax credit,” he said. “The fact that pending home sales are comfortably above year-ago levels shows the market has gained sufficient momentum on its own. We expect another surge in the spring as more home buyers take advantage of affordable housing conditions before the tax credit expires.” Yun added that mortgage interest rates cannot remain at rock-bottom levels for a sustained period and will likely inch higher in 2010.

The question is whether expected job growth in the second half will support home buying activity and absorb enough inventory to bring a rough balance between buyers and sellers. if you think so, then home prices will stabilize or even modestly rise; if not well here we go again.

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