Mortgage and Real Estate Markets

by Gaurav Bhola, MSM

PersonalHomeLoanMortgages.com

The housing market has been in a downturn for a while now. The mortgage market is part-and-parcel of the housing market, has also been seeking a recovery. The reports on existing home buying sales for July and August shook the markets last week. Also, the decline in the consumer price index figured into Wall Street's equation. However, the report for existing-home sales, the report's median price component was stronger than PREDICTED.

A Buyers Market

The current home inventories are enhancing opportunities in the buyer's market. The existing-home sales were 4.3% lower in August at 5.50 million unit annual pace from 5.75 million pace in July. The sales of single-family homes declined 3.8%, while sales of co-ops and condos fell 8%, maintaining infirmity in the housing market.

The current unsold home supply grew to 10 months from 9.6 two months ago. In parallel, single-family home supply climbed to 9.8 months from 9.2 months, the premier level since May 1989. Also, the median price came down to $224,500 from a revised $228,700 in July.

However, the decline in existing-home sales in August was less than expected compared to the 12.2% dive in THE pending-home sales index in July. This was a good surprise given the deterioration in the real estate market and homebuilder confidence in recent months.

Buyers Look for Opportunities

The housing, mortgage, and real estate market have been tough in recent months for home sellers, not for home buyers. While some home buyers have decided to stay on the sidelines for the time being, many are looking for bargains. The home buyers will eventually help reinvigorate demand for mortgages such as, fixed rate mortgages, adjustable rate mortgages, 100 percent financing loans, subprime mortgages, conforming loans, interest- only mortgages, and second mortgages.