Markets

The average 30-year fixed mortgage rate is at a three-month low. Home prices in many areas have fallen. And despite the meltdown in non-traditional mortgages, many community banks still offer jumbo loans (above $417,000), though rates have risen.

"If you want to move up to a bigger house or buy a home for the first time, and you have the credit and qualifications to do so, it's an excellent time to buy," says Gerri Detweiler of FreeRateSearch.com.

Contributing to a buyer's market:

Lower long-term mortgage rates. The average 30-year fixed rate reached 6.52% last week, the lowest since May 31, according to Freddie Mac (FRE). Frank Nothaft, Freddie Mac's chief economist, says declining yields for Treasury securities and the housing slowdown helped produce lower mortgage rates.

Falling home prices. Nationwide, median home prices fell 1.5% in the second quarter, according to the National Association of Realtors. In addition, sales were down in most states, the NAR said.

That's given buyers with sound credit a lot of bargaining power. James Aberle, 38, of Phoenix recently paid $288,870 for a home originally listed at $350,000. The builder, through its mortgage arm, arranged 100% financing and paid for private mortgage insurance, which typically kicks in for buyers who put down less than 20%. The builder also paid $7,400 toward closing costs, Aberle says.

And for some buyers, real estate appraisals are producing lower home values, allowing them to renegotiate the price, says Kyle Kilpatrick of LendingTree.com.

Available jumbo loans. Many lenders have abandoned non-traditional loans, including jumbos. That's because investors, fearful that the crisis in the subprime market is spreading, are reluctant to buy jumbos and other loans that mortgage investment giants Fannie Mae (FNM) and Freddie Mac won't buy. But now, many community and national banks have stepped in to offer jumbo loans. They're better positioned than some other lenders to make those types of loans because they can fund them with customer bank deposits, says James Chessen of the American Bankers Association.

Lower rates on adjustable-rate mortgages. Rates on ARMs are often based on Treasury yields, which have fallen, notes Keith Gumbinger of HSH Associates.

2007-08-27 11:00:50

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Tttedison 10:46:34 AM Sep 17 2007

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What are homeowners that have been in thier homes for years to do now?if they want or need to sell they have lost a lot of equity due to the false markets,now appraisers are saying the homes are worth much less than a year ago due to market crashing. The ones that did home buying the right way will now have to pay for those who were greedy and could not afford the payments after the resets kicked in.We will all be hurt by this .

ergo7rick 05:55:00 PM Sep 14 2007

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GREED drives it all. From the GREEDY bankers and mortgage companies that try to dictate to you how much you must offer up in terms of privacy and money, the GREEDY homesellers that think they deserve huge profits from living their house for just a few years, the GREEDY title companies ripping off people with exorbitant fees for titles that everyone knows are free and clear and just need updating, to the GREEDY real estate agents who in the end are the cause of it all by trying to drive up prices so they can gouge their exorbitant fees out of the deal. Yes, GREED drives it all. Better to not buy and let 'em keep their greed, than to buy into sucker deals where you get left holding the debt. It's a game of musical chairs and you're going to be the one left out in the end.

deespiano 01:31:00 PM Sep 08 2007

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MUCH ADVERTISING ENCOURAGES SELLERS TO HOLD TIGHT, THAT THE MARKET IS BEGINNING TO IMPROVE FOR THE SELLER. OUR MTG PMT HAS COME DOWN TWICE IN THE LAST TWO MONTHS. PROFESSIONALS ADVISE SELLERS NOT TO LET THE VULTURES PREY ON SELLERS AND NOT TO ALLOW REALTORS TO ENCOURAGE SELLERS TO LOWERS THEIR PRICES PUTTING FEAR INTO THEM, GETTING THE LISTING THEN WALKING AWAY IN A WEEK WITH HIS/HER COMMISSION. HANGING ON IS WHAT WE'RE FORCED TO DO AND SINCE WE HAVE A CROOKED COUNTY APPRAISER WHO HAS COST US A CROOKED CTY ATTY AND POSSIBLY CTY COUNTY ADMINISTRATOR...I HOPE. IF WE DON'T GET A COMPARABLE VALUE TO LAST YEAR'S APPRAISAL WE'LL SEE OUR COUNTY APPRAISERS WITH AN ATTORNEY. DON'T YOU PEOPLE REALIZE HOW MUCH THE GOVERNMENT AND THE MEDIA PUTS THE FEAR OF HELL ON EACH OF US. 3/4 OF OUR GOVERNMENT STATA AND LOCAL ARE ALL CROOKS. RELAX.

billtstrong 10:52:59 AM Sep 08 2007

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I've been investing in savings bonds, municipal bonds, and precious metals since 2001. Stayed out of this housing bubble because I realized incomes could not justify the high prices of houses. Owning a house is not an investment and should not be considered part of your net worth. In the long run, a house earns 1% above the inflation rate in annual appreciation while stocks (with reinvested dividends) gain 7%, bonds gain 2 or 3% relative to inflation. It is important for me to get a good quality house, one built before 2001, but I can wait another 5 years. I prefer to continue throwing $970 per month away on rent than to throw $970 per month to the bank in mortgage interest and another $400 per month to the tax man in property tax payments.