U.S. Housing Market Gloom Lifting?
By Carey Eskridge
While conventional wisdom has the housing market taking a beating, Texas has been largely immune to the slump that is hitting other parts of the country.
As Dee has pointed out recently, market indicators for San Antonio, Dallas, Austin, and even Houston may not be the best we’ve seen in recent years, but there’s no "sky is falling" scenario playing out in the Lone Star State. A few recent news items may indicate that recovery is on the way.
Last week saw two bits of potentially good news.
GOOD NEWS FOR THE U.S HOUSING MARKET
First, Freddie Mac reported nearly across-the-board drops in mortgage interest rates. Perhaps most importantly, the average rate on 30-year, fixed-rate mortgage fell to it’s lowest point since September 2005, resting at 5.96 percent, but rates on 15-year fixed and 5-year adjustable mortgages also fell.
Second, the Bush Administration announced an agreement between Treasury Department officials, mortgage lenders, and Wall Street firms
to freeze interest rates for five years on subprime mortgage loans
taken out between January 1, 2005, and July 30, 2007, with rates
scheduled to increase in 2008 or 2009. The agreement doesn’t apply to
loans that are already delinquent, estimated to be 22 percent of
subprime borrowers.
About $57 billion in subprime loans were
scheduled to reset rates during the final quarter of 2007.
Although we still have a long way to go, modest efforts such as these can help correct the
national market. That’s especially good news in Texas since we’ve remained
relatively unscathed.
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