It appears to be a positive outlook for our 2012 housing condition. Luckily, snow has not paved heavy enough to cause major delays in our travel. As cold as it was this past Sunday, we continue to receive a good amount of foot traffic indicating serious buyers in search of their new home, even in the midst of winter. And as most sellers would agree, those contracts they receive in the winter compared to summer are taken much more seriously and with a higher chance of settlement.

We are also seeing more and more contracts from a trickle effect of decrease in debts. More and more homeowners are able to pay off their debts and seeing credit as becoming easier and easier to achieve. Some banks are finally reaching a point of stability where they are able to get back to business and help push our housing market forward. This is a positive indication that our economy is on the path to recovery.

Another positive sign of strength in our economy is when we see buyers creating access to liquidity, by adding a home equity line of credit. Having liquid cash readily available is a very important first step when buying a home and using that cash towards your good faith shows sellers seriousness and strong motivation. And with interest rates continuing to stay at an all-time low, it’s a perfect combination for making a purchase.

Banks are now in a position where they are capable and permitting homeowners to refinance what was once a very large debt. Homeowners are now able to consolidate their multiple debts into one, taking a huge burden off of families, thereby, encouraging stability in repayment of loans and creating a sense of security.

Buyer’s affordability to purchase a home is soaring for a couple of good reasons. With discounted homes, such as short sales and foreclosure, many are finding these homes in surprisingly great condition. And what better time to purchase with financing when it’s costing just under 4% to do so right now? Not to mention the Home Loan Purchase Grant Programs available from specific lending institutions, which are not just for first time homebuyers, but repeat buyers as well.

Lastly, bravo to our private sector for creating more jobs in the latter half of 2011! As more opportunities arise for those seeking jobs, it is only another positive sign that our economy is moving on the path of recovery.

Rates are stunningly low … now is the time to refinance or get into that mortgage you’ve been holding off on.  Don’t wait for them to go lower as lenders will make it harder for you to qualify if they can’t make real money off of your loan and as we all know, the lower the interest rates the less money you’re paying the banks.

Check this out:  http://money.cnn.com/2011/12/15/real_estate/mortgage_rates/

Today’s market plays to the advantage of buyers, who should be swooping in to make the most of reduced housing costs and favorable interest rates. Many are sitting by and waiting for the market to turn around. But when the market turns, today’s bargains will be yesterday’s missed opportunities.

While home prices may drop further, it is likely that these decreased prices will be accompanied by increased financing costs due to rate cuts by the Fed. This may be counterintuitive, but cuts in the rates that the Fed loans money to banks can result in higher interest rates on mortgages. This means that any money saved on paying less for a house in a few months time will be offset by your having to pay off their mortgage at a higher interest rate making “playing the waiting game” a waste of time (and very little fun).

This rate increase isn’t just speculation. Just a couple of weeks ago, in early February, the fixed mortgage rate jumped a full half-percent, making it the fastest rate increase in 20 years.

The following scenarios demonstrate how even as home prices may drop, monthly mortgage payments basically stay the same due to increased interest rates: Prices decrease by 5% and interest rates increase by 0.5%. A home priced at $218,900 with a 6.04% interest rate will see a monthly mortgage payment of $1,054. If there is a price drop of 5% to $207,955 and an increase in the interest rates to 6.54%, the monthly payment will be $1,056. Consider a 10% price drop to $197,010 and an interest rate increase to 7.04% the payment will be $1,053.

We currently have a large inventory of prices and sellers motivated to sell with historically low interest rates that seem to be rising quickly. Many of my current clients kick themselves for not purchasing in 2002 or earlier. I just hope the kicking won’t continue because they waited out the market again.