Pending Home Sales and Mortgage Market Update!

5. September 2007 by Burbank Real Estate.

The Pending Home Sales number came out this morning at down 12.2% for July versus the 2% that was expected.  Realtors are reporting that sales are taking longer to close and many are failing to close.  Much of this, I’m sure, is tied to our current credit market situation and how much harder it is getting to qualify for a loan.

On a more important note is what  the Libor rate is doing.  Libor stands for the London Interbank Offered Rate.  This is a widely used benchmark that many mortagages are tied to.  The 3 month Libor rate is at 5.72% with the one month rate at 5.82%.

What this means is that the many homeowners whose adjustable rate mortgages are tied to Libor are going to be in for a surprise when their payments readjust. This also highlights the fact that current rumors of an interest rate cut by the Fed may be meaningless for the average consumer.

If the Libor continues on this path and you have an adjustable rate mortgage, start looking at your options now!  Review your mortgage terms and see what benchmark your new rate is tied to.  Don’t wait until you readjust and can’t afford the new payment.

Here in Burbank there are currently 365 properties, on the MLS, on the market, which has stayed steady over the last few weeks.  Days on market are 57 days, on average, although I see many properties that have been on the market upwards of 90 days.

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