Posts

Regional Home Sales Decline Despite Interest Rate Drop

/in /by

Regional home sales declined into the double digits in November, but prices remained high. RealComp and RE/MAX of Southeastern Michigan released reports on Tuesday confirming that buyers won’t have any price relief when compared to last year. The two separate reports reveal that the number of home sales in Southeast Michigan dropped by more than 14% from October to November. Even with a considerable interest rate drop, the largest since 2008, consumers aren’t enthusiastic. Many are delaying listing their homes for sale because buyer demand is weakening, and they don’t want to risk their current lower mortgage rates.

 

Home Builders Buy Down Rates to Keep Prospective Buyers

/in /by

Builders are taking matters into their own hands, and the high interest rates and falling demand are forcing the issue. Rate buydown programs and other interest rate specials are on the rise in the new-construction market. Builders are making concessions to their bottom line in order to keep prospective buyers in the game. Builders are offering programs to lock down interest rates, guaranteeing rates or offering a few years of discounted interest rates so buyers can later refinance at a better rate. The saying “marry the home and date the rate” describes the thinking behind the move. According to the vice president of operations for M/I Homes Detroit, the company has spent millions to secure enough funds to provide several dozen loans. They’ve done this three times since this summer.  The company takes a 4 to 5 percent hit on the purchase of a home. Robertson Homes has taken between 1 1/2  and 2 points off a fixed-rate mortgage by contributing funds to the lender up front.