Real Estate Market Slows

The market is changing.

Part of it is the usual quiet that August brings: so many people enjoying the last of summer, taking trips, getting ready for school. As I compare notes with other agents, we are all saying the same thing —our listings aren’t getting many showings, our open houses are not busy.

It’s a bit surprising, despite the economy, that we aren’t seeing more of a sense of urgency for home buyers with the current interest rates and changes looming in the lending world.

I spoke with Kevin Kennedy of RPM Mortgage and Mike Miller of Bank of Commerce to get their perspectives.

Miller said: “The cost of borrowing is going up for many homeowners with loans above $625,500. FannieMae and FreddieMac  are lowering the conforming loan limit on October 1, 2011. This means that borrowers will be subject to jumbo loan terms, that is, higher rates and harder qualifying.” 

Kennedy is working with people who need to lock in before the conforming $729,000 goes away. 

He said, “I have several families trying to get into contract on the right home before they are potentially priced out of the market. Today, these families can afford an $800,000 home, and in the near future they might only be able to afford a $700,000 home.”

Both lenders emphasized the historically low rates.

Miller said, “Almost anytime there is uncertainty in the markets, such as the recent stock market losses, interest rates usually fall. We are presently at 4.25 percent for 30-year loans, and 3.75 percent for 15-year loans.” 

Lower interest rates increase people's buying power.

It’s also a great time to consider refinancing. 

As Kennedy pointed out, “Over the past week we have seen major fluctuations in the dynamic mortgage market. We are currently experiencing historic low interest rates as Wall Street investors seek lower-risk investments. Bond yields and mortgage rates are down as the market volatility has increased.”

The lenders agree that rates and terms combine to make this an opportune time to buy.

As Kennedy said: “This is one of the best buying opportunities I have seen in the past several decades. It is rare when you can purchase a great East Bay home in a good location for a discounted price and get a historic low-interest rate.”

For specific questions about rates or loans:

• Kevin Kennedy, RPM Mortgage, 3201 Danville Blvd., Suite 195
, Alamo, 925-719-1919 
• Mike Miller, Bank of Commerce, 151 Railroad Ave., Danville, 925-831-6069