More bad news…or is it?

Last week we received the March housing numbers and of course sales “plummeted” and “prices slid” and the headlines declared “Sour Note on Housing!” Though the numbers don’t lie as I have stated in the past, real estate is local, local, local. The North Central Connecticut market (the 10 or so towns North of Hartford and East & West of I-91) are seeing signs of a rebound.

Inventory is trending down while Under Contract units are increasing (these numbers will not be reflected until the May and June “sales” numbers are publicly published). Rates remain low and 1st time home buyer mortgage money is readily available

Some buyers are sitting on the fence hoping to time the bottom of the market, but increasingly we are finding savvy buyers taking the plunge. They know that they are buying a home that just happens to be a good long-term investment too. They will occupy their home with their families, make improvements to it, and enjoy all of the benefits – both tax & pride of ownership. They are doing this while choosing from a wide selection of houses and qualifying with historically low rates.

Instead of relying on the Headlines we think understanding and evaluating the local market is a wise move.

Risk Based Lending

This morning we had a meeting with our agents and our in-house mortgage specialist, Peter Mastrangelo. CTMove Mortgage

Though the mortgage market is changing daily, Peter focused today on two aspects of the residential mortgage market, Risk Based Lending & Declining Market.

Both Fannie Mae and Freddie Mac, the two largest buyers of residential mortgages, have instituted “risk based” lending. According to Peter home buyers with less than 30% down (that is most of our buyers) and who have a credit score of under 720 will end up paying more for their loan in the form of additional points (each point being equivalent to 1% of the mortgage amount) OR a higher interest rate or some combination.

The good news is that with increased FHA mortgage limits, now $440,000 in our area, the risk based lending premium can be minimized as FHA doesn’t add on until a FICO score reaches below 620. Everyone agreed that we love Government loans (FHA/VA) and that for 1st time buyers, CHFA will generally beat everything else on the street.