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Hot mortgage rates greet warmer weather

If you're smart about making a competitive offer

If you're smart about making a competitive offer and you're savvy about finding the cheapest mortgage rates, you're bound to score a great deal if you buy now. Credit: AP

After a brief spike in mortgage rates earlier this spring, the cost of home loans has once again has settled to record lows.

This is great news if you’re beginning a housing search.

Right now, the average 30-year, fixed-rate mortgage will cost you a bit more than 4 percent

Mortgage rates can change several times a day, but we were able to find loans as cheap as 3.625 percent in several major markets with no points and less than $2,000 in lender fees.

Yes, mortgage rates are as low as they've ever been, and home prices are reasonable, off by a third or more from their highs last decade. But does that make this the right time to buy, or will there be a better deal around the corner?

This much is certain: If you're smart about making a competitive offer and you're savvy about finding the cheapest mortgage rates, you're bound to score a great deal if you buy now.

If you wait, there's no guarantee you'll get a better deal -- both mortgage rates and home prices could increase.

"The take-away for the buyer is this: With mortgage rates at a historic low, rents on an increase, and sellers still motivated to sell, now is an ideal time to buy a house," says Lorraine Labonne-Storch, a sales associate with Coldwell Banker Residential Mortgage in Maplewood, N.J.

So what can fence-sitters divine about today's real estate market?

There are two stories being told: The numbers say one thing, the professionals say another.

The numbers say any declaration of a housing recovery is premature, which suggests housing prices could remain depressed or even decline further if another wave of foreclosures strikes.

The national average home price ticked up at the end of 2011 to $196,000 and fell back to $195,000 in January and February, the most recent months for which data are available, according to Lender Processing Services, a Jacksonville, Fla., firm that helps lenders service mortgages.

This national average price puts us back at March 2003 price levels.

In January, prices fell in 91 percent of the ZIP codes the survey tracks. The 9 percent of ZIP codes where prices increased are concentrated in just 11 states.

While falling prices don’t indicate a recovery, they are good news for buyers seeking affordability. But it’s hard to tell how buyers feel about this information.

That's because the latest data from the National Association of Realtors showed a 2.6 percent decline in existing home sales in March compared to February, but a 5.2 percent increase compared to one year ago.

"Remember, all of the measurements are backward-looking, so properties going under agreement today do not show up as closed transactions for another 60 days or so," says Amy Tierce, regional vice president for Fairway Independent Mortgage in Boston. "By June, the numbers will illustrate what we are feeling on the street, a turnaround."

And this is where the professionals come in.

Anecdotally, we're hearing from people within the industry -- architects, builders and real estate agents -- that they're seeing improvement, at least in their local markets.

Ivan Choi, a senior vice president with Matt Martin Real Estate Management in Irvine, Calif., says five factors are making the housing market look better in many markets across the country:

-- The pace of new foreclosure cases is slowing,  although that could change.
-- The number of closed sales has improved marginally.
-- The number of available homes for sale has declined.
-- More homes for sale are receiving multiple purchase offers.
-- A higher percentage of sales are all-cash.

But these factors don’t necessarily mean the housing market is turning around, he says.

"The biggest drivers of housing are employment and consumer confidence in home purchases. Both of those are relatively weak," he says. "Until employment, mortgage finance and foreclosure home supply are improved or repaired, it will be hard to declare that the housing market has turned around."


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