Yesterday the S&P/Case Shiller Home Price Index was released and painted a bleak picture of the overall housing market.
from the release...
The U.S. National Home Price Index declined by 4.2% in the first quarter of 2011, after falling 3.6% in the fourth quarter of 2010. The national index hit a new recession low with the first quarter data and posted an annual decline of 5.1% versus the first quarter of 2010.
my take...
Yes, of course this is disappointing news yet it is being over played by the media. The issue at hand that no one is talking about still revolves around foreclosures. Over the last two years the federal government was pulling out all the stops to try and help struggling home owners avoid foreclosure. Because of that loan servicers were reluctant to force someone out of their home in a timely manner. The backlog of (pending) foreclosed homes piled up. Once everyone began to see that the loan modifications and workouts were not helping, the foreclosure process was accelerated which resulted in much more distressed inventory, thus lower home prices. How else could home values decline 7.8% in 6 months yet we post back to back gains in new home sales (up 7.3% in April per the Commerce Department). Bottom line, once these distressed homes are sold the values will stabilize. Thank goodness we live in Texas!
Mortgage interest rates are currently at some of the lowest levels seen in the past 12 months. Not quite record lows, but very close. If you are thinking about buying, or have clients that are thinking about buying, now is the time. With home values at the lowest since 2002 and interest rates near all time lows, there literally has never been a better time to buy.
Call us with any questions!
Adam Simmons
Crystal Clear Mortgage
888-634-6911
adam@crystalclearmortgage.com
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