I believe that the new congress will be more business friendly and finally start putting the housing downturn in our rear view window. It would also appear that the President has heard the message sent in November and is willing to work with this new group. From where I stand, what makes America great is our ability to change if something isn’t working. Most societies do not have this flexibility and are resistant to change; therefore, can’t move forward.
Interest rates will continue to be volatile because we just don’t have answers about where this economy is headed. Just in the last month we’ve seen the rate on a 30-year mortgage rate go from 4 percent to 4.875 percent and that was after the Federal Reserve said they would buy $600 billion in Treasury securities with the stated goal of stabilizing rates!
Assuming that rates stay in some kind of moderate range —like between 4.25 percent and 5.25 percent— the affordability index will continue to be better than it has in decades. However, underwriting standards will continue to be tight. Lenders are paranoid about having to buy loans back and will be very picky about details, which will drive borrowers crazy.
There is talk about eliminating the tax deduction for mortgage interest. It may well happen, but when it does, it will not be an isolated change. It will be done as part of a more comprehensive overhaul of the tax code, so it should not deter buyers from buying a home.
On the local level, unemployment is at 9-9.5% as of November 2010. We had a total of 670 homes sold and currently 784 on the market. The average sales price is $ 109,132.00.