Tuesday, December 18, 2007

Activity Has Finally Started To Pick Up Again

Interestingly enough, buyers are finally starting to take action. The number of loan applications taken in the first weeks of December is up 22% compared to the preceding two weeks here in San Antonio. Some of that increase can be attributed to the “last deals of the year” for builder close outs, but hopefully it is an indication that buyers are starting to take notice of the increased inventory and lower rates.
Financially speaking, inflation concerns headline the news these days. The Fed wants to fight off a recession (predicted as a 50/50 chance by former chair Alan Greenspan) with additional rate cuts but in so doing, risks pushing inflation even higher. The Fed, in its 3rd consecutive meeting, lowered interest rates last week to 4.25%. The last time this happen was in 2001. This Friday, the Personal Consumption Report comes out giving the best read on inflation. If CORE PCE remains under 2%, further rate cuts are likely. A reading above 2% could spell trouble.

Joshua Sigman
Senior Loan Officer
Legacy Mutual Mortgage

Wednesday, December 12, 2007

Have We Hit The Bottom?

As a mortgage banker here in San Antonio, I have been inundated with questions from prospective home buyers regarding whether or not we have “hit the bottom.” I find this question very amusing. It seems to me that everyone is trying to time the market, letting that govern there decision on whether or not to wait longer or buy now. Most people who have a financial background know that is very difficult, if not impossible, to time the exact point at which a market slump makes a turn around for the better. For that reason, I have always tried to lead my clients to base decisions on what they know is happening right now, and how it compares to history.

So my answer is simple. Right now, we know that employment growth is excellent in San Antonio. Right now, we know that there is more inventory on the market than there has been in the last three years. Right now, we know that interest rates are at a 26 month low. Right now, we know that it is a buyers market! If we are not at the bottom, we are close enough. Those who pull the trigger on buying a new home in the next month or so will beat the inevitable flood of buyers that will hit the market by the beginning of the 2nd quarter of 2008.

Joshua Sigman
Senior Loan Officer
Legacy Mutual Mortgage