Montana's Shifting Market
I am quite optimistic in most aspects of life, and finding silver linings in the real estate industry is becoming exceptionally easy as of late. Legislation, media kudos, declining interest rates and falling foreclosures figures all have positive reports as we move into summer, the traditionally busy selling season. Here is a brief recap.
In mid-May, Realtors® from around the nation converged on Washington, D.C. to “Rally to Protect the American Dream”. One report estimated as many as 13,500 professionals arrived at the Washington Monument and more than 10,000 attended the virtual rally to encourage Congress to help stimulate housing and the fringe markets in order to motivate the economy as a whole. The talking points of the rally included "Securing the Future of Homeownership" ...take action to improve the short sale process, support the independence and integrity of appraisals, enact comprehensive reform for Fannie Mae and Freddie Mac and have regulations establish QRM (Qualified Residential Mortgage) rules that allow reasonable access to credit for home buying consumers. Other topics included preserving the missions and purpose of the FHA program, reauthorizing the National Flood Insurance Program and bolstering commercial real estate lending.
Some "good news" national statistics were also presented at the mid-May meetings, which greatly favor Montana and our neighboring states. Montana received kudos as being in the top five housing markets which are actually showing price appreciation. South Dakota led the pace, according to statistics released by CoreLogic, with a price increase of 5.7%. North Dakota (4%), West Virginia (4%), Montana (3.6%) and Michigan (3%) rounded out the list.
Tracking of the six-month change in foreclosure inventory showed Montana had an 8% decrease. The national numbers ranged from a 32% decrease in Washington to a 13% increase in South Carolina. Montana’s distressed sales comprised 17% of the market whereas some states weighed in as high at 67%. The nation's shadow inventory of foreclosed or at-risk homes fell to 1.5 million in April, the lowest point since October 2008. For a more in-depth look at these national trends, go to www.eralandmark.com/trends
Mortgage rates hit a rock bottom historical low this month which presents an excellent opportunity for homeowners who are ready to refinance or those who want to purchase a new home. In fact, current rates are around half of the historical averages. Forbes online posted information by Money-Rates.com which reports that since the early 1970s, rates for 30-year mortgages have averaged 8.86%. And while 30-year mortgages exemplify a good deal in the range of 3.25%, 15-year mortgages are an even greater bargain near 2.75%. For those who do not plan to stay in their home for more than 5 years, the adjustable 5/1 ARM is currently at 2.325%. All rates are subject to fluctuation, but have been trending down in the past three weeks.
Shrinking inventory plus stabilizing prices and favorable financing terms in the form of phenomenal mortgage interest rates equals time to go shopping for today’s buyers. The signs of a more balanced marketplace give hope to sellers, as we watch these key indicators point to the return of a more "normal" market locally.