Cold weather, hot rates

It’s a new year and things are definitely picking up in Lincoln real estate. The cold, cold temps and record snowfalls in December caused a real downturn in home sales. I don’t know about you, but there are not many people who want to interupt their holiday plans and plod through 5-foot snow drifts to look at houses. In November, the Midlands MLS posted 323 homes sold. That number dropped to 162 in December. But things are looking up. Through January 18th, 2010, there were 43 homes sold and 113 “under contract”.

 It’s also important to note that the current low interest rates might not last much longer. Right now it’s possible to get a 30-year-fixed rate at about 5%. However, barring any last minute change, the Federal Reserve Bank plans to stop buying mortgage backed securities on March 31, 2010. That could result in an increase of .5% to 1% to mortgage interest rates (or rates around 6%). Your loan officer can detail this further, but an increase from 5% to 6% on a $100,000 loan (for example) could mean you would be paying at least $50 more a month.

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