Monday, November 15, 2010

Home Prices Stay Flat While Mortgage Rates Dip Again

The National Association of Realtors (NAR) reported that home prices stayed essentially flat in the third quarter compared to the same time frame a year ago. This price stabilization is encouraging, given that sales of existing homes in the period did drop compared to both the prior quarter this year and to the same quarter a year ago. Of course, both those time periods saw buyers rushing in to take advantage of the federal tax credits.

On the mortgage front, national average mortgage rates dipped again according to Freddie Mac's weekly survey. This was considered by most experts to be the result of the Federal Reserve's recent announcement of their second round of "quantitative easing," dubbed "QE2." This is the plan in which the Fed will buy up to $600 billion in Treasuries from now till the end of June next year. Not surprisingly, mortgage applications spiked up 5.8% for the week for both purchase and refinance loans, according to the Mortgage Bankers Association.

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