Well, another week has gone by, and mortgage rates drifted to a new low, per the latest Freddie Mac data. Yawn.
Yes, we know the 30-year fixed is at its lowest point ever, but it’s getting tiresome. In fact, it has been tiresome for quite some time now.
Sure, it has boosted affordability and made home buying more attractive, but it seems like we’re forgetting about all the bad stuff hanging over our heads.
Perhaps that was the idea…
All of a Sudden It’s a Seller’s Market?
This has created a bit of a strange seller’s market, which I pointed out a week ago in my piece about how the low mortgage rates may be a home buyer trap.
Whether that is true or not remains to be seen, and we won’t know for a while.
But I do feel the low rates are creating a strange housing market, at least out here in Los Angeles, where it’s near impossible to snag a decent property nowadays.
Rewind just a few months back and properties were sitting on the market for days and days, often with multiple price reductions and still no bites. Seemingly good homes for sale, just no takers.
Today, a property is listed and pending before you even knew it was listed. What the heck happened?
Is the housing crisis over? Did we finally hit bottom after the many years of predictions saying it was going to be in 2009, 2010, 2011, etc?
Or is this just another false positive, created by insanely low mortgage rates?
Junkers Being Listed
One thing I noticed a lot of lately was the quality of homes being listed.
It looks as if the floodgates have opened, and now everyone and their mom wants to throw their house up on the MLS. Perhaps real estate agents are telling them, “This is it, your get out of jail free card.”
And it’s ugly. All the “funky” houses seem to be showing up. You know, the ones on the freeway, or without floors. Okay, that might be extreme, but it’s not pretty.
A year ago, you certainly wouldn’t have seen these homes listed, as it would have been a waste of everyone’s time.
But now, because rates are so low and affordability is so high, it’s perfectly acceptable to list just about anything.
These homes are being marketed as “great fixed-uppers” and “once-in-a-lifetime opportunities.”
A little strange given the fact that just months ago no one wanted anything to do with buying a home, at least as an investment.
The Silver Lining
While I probably sound overly bearish, I think there is a silver lining.
Despite the housing market being downright silly in some parts of the country, at least new home buyers will be properly qualified for the mortgages they take out.
And underwriting standards are a lot better than they were pre-housing bust.
So the new crop of home buyers will actually be able to afford their mortgages, and we won’t have to worry about millions of resetting exploding ARMs!
Still, with so much bad economic news out there, and so much uncertainty in the air, it’s hard to imagine fighting over a piece of property, especially an overpriced piece of you know what.
Read more: Tips for first-time home buyers.