Foreclosures Fall to Lowest Level in Six Yearsbusiness-charts6-300x199

Data from RealtyTrac, a foreclosure tracking site, has provided further proof that the mortgage and housing market is making great strides in the recovery. According to the latest stats, mortgage lenders repossessed fewer U.S. homes in January, bringing the number of completed foreclosures down to the lowest level in more than six years.

Last month, 30,226 homes were foreclosed on by mortgage lenders. This represents a drop of 4 percent from December, according to RealtyTrac. When compared to a year ago, the figure is even more significant. Completed foreclosures were down 40 percent from January 2013 to the lowest level since July 2007, the firm said.

After emerging from a depressing slump, the U.S. housing market may be in for even better news in the near future, as reports indicate that more homeowners are able to keep up with their mortgage payments. The state of the overall national economy has a tremendous effect on the mortgage and housing markets, which is why steady job growth has aided in the real estate recovery.

Rising home values are another effect of the foreclosure tides waning. With fewer distressed loans and depressed properties in the national inventory, it’s no surprise that home prices are on the upward path. Furthermore, fewer homeowners are having equity issues, as reports have shown that underwater borrowers are finally able to reach the surface.

Is Now Still a Good Time to Buy?

Those who are still on the fence about buying a home would do well to give it serious thought in the coming months or weeks. If you recall, last year we saw a lot of markets in Nevada and California where bidding wars were commonplace. A recent article from Chicago Magazine indicates that once spring comes, we may see a resurgence of this high demand in desirable markets.

Mortgage Rates Update
Currently Trending: Slightly Higher

Last week saw rates worsen slightly, with the MBS (mortgage-backed securities) market ending the week -82 basis points worse than we started. By far, the most significant event that altered mortgage rates was new Federal Reserve Chair Janet Yellen’s first time up in front of the House Financial Services Committee. Her prepared statement was released ahead of her testimony. As a result, MBS sold off as her statement made it clear that she would support the “continuality” of the Fed’s programs and direction.

Keep in mind that she was a major contributor to many (if not all) of the Fed’s decisions under Bernanke as she was Vice Chair and a major player. She was never listed on the rolls as a dissenting vote and the markets misconception that she would be more “dovish” (to bonds anyway) has proven to be wrong.

What does this mean to the average mortgage borrower? It could mean that rates may inch up a little more, since the MBS levels are lower. In simplest terms, if you haven’t locked in a low rate on your next mortgage yet, now would be a good time to do so if you’re in the position where it makes sense, financially. Talk to your mortgage consultant about developing a good timeline and/or strategy for securing a low rate on a loan program that works for you. Even those who are interested in refinancing would do well to remember that rates are likely to increase; however, because mortgage rate volatility remains high, there are no guarantees.

Mortgage Rate Forecast: Neutral

This week the market finds itself in a pattern that is neither bullish nor bearish. The best thing to do this week is stay closely tuned to the market in real time to watch for a change to either position. And don’t hesitate to contact your lender with questions or concerns.

Are Rates Still Affordable?

Even if they are inching up, rates are remaining near historic lows. Those who are waiting for the rock-bottom rates of a few years ago may be disappointed – or they will at least have to wait several years (or more) before we see those exceptionally low rates again. Whether or not current mortgage rates are affordable will naturally depend on each borrower’s needs and budget, but it’s fairly safe to say that today’s rates are in no way outrageous.

If you would like a look at today’s current mortgage rates, simply reach out to a lender serving your area. For borrowers in the Lone Star State, Kelly Decker and his team of mortgage professionals are happy to assist prospective borrowers with exploring different rate and program options. Simply call (972) 591-3097 for a no-obligation rate quote and mortgage analysis.