Mortgage Market update

Interest rates on first mortgages continue to go up and then back down a bit, so the rollercoaster ride continues. It is likely the Fed will raise the Fed funds rate late this year. Officials want to insure inflation is kept in check, despite an abundance of economic figures suggesting that growth will continue. They are concerned about increasing inflation, which is being driven by the price of oil and other commodities. If the fed raises the funds rate from it's current rate of 2% then this could actually help keep fixed rates low for the time being as inflation is the enemy of mortgage bonds and interest rates.

Existing home sales rose slightly higher than expected in May as home buyers responded to a buyers market. A modest gain of 2% but a gain none the less. Home buyers are starting to get off the fence to grab a great price on a home and secure a good fixed rate while they are still low. But depending on where you live some prices still have not fallen much if any such as NYC, others like Las Vegas, Phoenix and certain areas of California have dropped dramatically.
In the areas where prices have dropped dramatically there are great deals to be had but you have to do your homework. Some of the lower price ranges are seeing multiple offers because the demand for these homes are greater because of first time home buyers and real estate investors, don't get caught up in a price war it is a buyers market and there are plenty of homes out there that can be bought for a big discount.