Quick: Home prices have bottomed out or they could still drop an additional 25%.

Depending on what you read and whom you believe, you will hear diverging, even contradictory predictions outlining housing trends through the remainder of this year. Some analysts appear to be applying possible local market conditions to the the national scene, something which simply shouldn’t be done.

Different Conditions In Various Markets

What happens in Boise, Idaho is a far cry from the conditions in Detroit, Raleigh, Sacramento and elsewhere. True, the overall housing market was flat or down in 2007, but there were some bright lights then and there will be additional ones in 2008.

Fact: Roughly half of the U.S. metropolitan statistical areas saw the median prices for existing single-family homes increase during the fourth quarter of 2007. Early indications for 2008 is that many of these same areas are seeing the upward trend continue. Source: National Association of Realtors.

Fact: Home sizes are up, approximately 50% bigger than homes built three decades ago. Better construction materials, sophisticated electronic connections, improved appliances including heating/cooling and the inclusion of outdoor amenities such as in-ground pools adds to the cost of a new home.

Fact: The biggest pressure on the housing market has been adjustable rate mortgages, particularly for those homes financed when rates were at their lowest. With hundreds of thousands of homeowners refinancing in 2008 thanks to lower interest rates, the number of homes becoming available due to foreclosure is dropping. As the market tightens, home prices will increase.

Boom, Then Bust?

Some analysts are predicting that 2008 will turn out better than expected in some markets, but are cautioning that the gains could be short-lived if mortgage rates head up again come 2009.

Speculating how market conditions will perform has been going on for years — getting it right is a science in and of itself!

Further Reading:

Why Housing Prices Are Nearing Bottom

Home Mortgage Calculators and Tools

From the New Deal, a Way Out of the Mess

Paying Off Your Mortgage Fast!

Tags: builders, foreclosures, Home Mortgages, home refinance, housing prices, new homes, realtors

Seizing an opportunity is all about timing, therefore for the person who owns a home and is looking to refinance, consideration must be given today whether to seek a new loan immediately. Why the rush? Because, no one knows what mortgage rates will be six weeks or six months from now. They could continue to drop, but they can just as easily start climbing again.

Take Action Now If You Need To Refinance

If you’re like the vast majority of American homeowners who is satisfied with their current mortgage, then you need not do anything. However, if you are part of that small segment of homeowners who is in danger of losing their homes or under financial pressure as their mortgage rate resets, then taking action as soon as possible is advisable.

Aren’t Rates Set By The Fed?

Rates are affected by what the federal government does, particularly as the federal rate fluctuates, but that is only part of the equation. Your specific rate is actually determined through secondary markets such as Fannie Mae and Freddie Mac, mortgage investment arms founded by the federal government.

Fannie Mae and Freddie Mac, along with other mortgage investors, buy up loans that lenders make and either hold them as an investment portfolio or bundle them with other loans into mortgage-backed securities. These securities are sold to mutual funds, stock investors, and other parties, who trade them much the same as Treasury securities and bonds are traded.

Take Action Now

Perhaps you are waiting for mortgage rates to slip another 1/8 to 1/4 percent before you take action. Unfortunately, even if the Federal Reserve cuts their fund rates as they are expected to do once again in March, there isn’t a guarantee that mortgage rates will also decline. In fact, sometimes a slight up tick in financing rates takes place. Again, other factors weigh in besides the fed rate.

Yes, everyone wants to receive the lowest rate possible when financing a home, car, or special project. But, to delay can be costly adding hundreds of dollars annually to loan costs for consumers who gambled and lost.

For more information about refinancing, please visit SayLending.com to make the right choice in home refinancing. Check out the helpful smart money tips to learn about important ways for you to save money.

Tags: Fannie Mae, Freddie Mac, home refinance, mortgage loan, mortgage rates, smart money tips