Are Interest Rates and Mortgage Rates The Same?

On January 25th, Fed Chairman Bernanke announced that interest rates were going to be held at the current rate through the end of 2014. He was specifically speaking about the federal funds rate which is the rate the Fed lends money to banks. Most consumers assume that interest rates and mortgage rates are the same. Of course, interest rates do have an influence on mortgage rates but there are many other factors that impact mortgage rates. Mortgage loan officers will quickly tell you that mortgage rates change frequently. In fact, they change multiple times per day. Currently, we have some of the lowest rates ever recorded. But that will not last forever.

There are a number of factors that are likely to move rates higher over time. Mortgage rates are influenced by long-term bonds. The 30-year bond has a big impact on the 30-year fixed mortgage rate. Right now, the Fed is purchasing those bonds through a program called Operation Twist. This is intended to keep the 30-year mortgage rate low. But the Fed cannot keep doing this indefinitely due to our debt and deficit problems. When that program ends, the rates will rise and normal investors must come back to the table to purchase those bonds. There is also pending legislation for Qualified Residential Mortgages (QRM). This legislation proposes a standard 20% down payment plus a requirement for the banks to maintain a holdback of 5% on every loan. Analysts expect to see these higher bank costs recovered by increasing rates and more fees. Freddie and Fannie have already implemented additional fees. FHA is expected to also add new fees. The future forecasts from the Mortgage Bankers Association and Freddie MAC predict that rates will rise in 2012 and 2013 back to the 5% range. In 3-5 years, rates are expected to jump significantly. The average mortgage rate for the past 50 years has been 8% and we are likely to see rates in that range again.

We have the unusual circumstance of very low home prices and very low mortgage rates! If you would like to discuss the best strategy for your situation, please contact Dan Petersen at 678-439-6699 to learn the facts in your local market.

An Early Spring Real Estate Market!

The famous groundhog General Beauregard Lee did not see his shadow and predicted an early spring for Metro Atlanta. And Prudential Georgia Realty is seeing an early spring market for real estate. Buyers are out and pending sales are increasing. But many markets in our area are seeing very low levels of inventory for sale. The latest numbers in many of our markets show inventory levels down 25% – 30% from this time last year. The mix of properties in some areas is also changing. For the 20-county metro area, short sales & foreclosures were 60% of total transactions last year. But a significant portion of those were in the low end of the market. So looking at national numbers or even Metro Atlanta numbers can be misleading. Remember that real estate is local and many markets are different. We are now seeing lots of markets and price points where short sales & foreclosures are a small portion of the available inventory. That means that market conditions are improving for sellers and resales are going to be more popular in 2012!

If you want to attain the highest market value for your property, you must have exceptional marketing. Our Advanced Property Marketing System was designed for the current market conditions and is the most effective approach available. The results prove the case. Since introducing this advanced system, our company is #1 for listings sold in 2009, 2010, 2011 and 2012.

If you are interested in selling your property, contact Dan Petersen today to get started. 678-439-6699.

Atlanta Home Price Update

Dan Forsman, President & CEO gives an update on the Atlanta Real Estate Market and Home prices.  Why has the recent news shown that home values have declined in Atlanta.  Where are the opportunities!







FOX FOCUS: Atlanta Home Prices:

To find out more about your local market, contact:

Dan Petersen
Petersen Partners
Prudential Georgia Realty

FHA will keep funding flips

FHA will keep funding flips | Inman News

The FHA will extend its temporary waiver on its anti-flipping rule.  This will basically allow investors who are flipping homes to sell to buyers using a FHA insurned financing product within the 90 period that the home was originally purchased.

Check out the full article at Inman news!