While we wait to see what Congress does with the $700 billion bailout, real estate and mortgage business continue!! Wednesday evening the Senate passed their version of the bailout and the House is expected to vote on Friday. What Congress is hoping will happen is the banks will open up credit lines between banks and also make it easier for consumers to get mortgages, auto loans and student loans. The credit market is a lot more difficult than it was a few months ago, a lot of that will continue, but hopefully it won’t get any worse!
I have had several clients call wondering how the bailout will affect them. Right now, there is no change, it’s business as usual. Mortgages are harder to qualify for than they were a few months ago, but they are still available. Your credit score is important and so is your down payment. The bailout will affect interest rates as many will pull money out of treasury bonds and put it in the stock market plus the Treasury Dept will have to sell bonds to pay for the bailout. No one knows exactly how much of the $700 billion will be used, the initial amount was going to be about $250 billion. This may cause interest rates to creep a little higher
There was good news in the Twin Cities area for home sale prices. In the 20 largest US metropolitan areas, July home prices fell a record 16.3% from a year ago, according to the latest Standard & Poor’s Case-Shiller report. It was the biggest annual decline on record even in the Twin Cities metro area where home prices fell 13.1% in July. But the good news: Home prices in the Twin Cities rose for two consecutive months this summer. From May to June, prices rose 0.9% and from June to July, prices rose 1.3% – the largest increase of all 20 communities surveyed. The Minneapolis Area Association of Realtors reports that there has been an uptick in sales from month to month this summer.
Right now it is a wonderful time to buy a home as rates are still low and home prices may be near their lowest point. It is really hard to predict when the market will be at the low point, but based on home sale prices in the Twin Cities – we may have hit it. If you are looking to buy, make sure you are pre-approved for the home mortgage and have fun looking!!
