Borrowers move as new bailout plan drops mortgage rates
By Dale Kasler | Sacramento Bee
Stuart Stenhouse has been watching the housing market for some time. On Wednesday, lured by a plunge in mortgage rates, the 40-year-old Sacramentan jumped in.
"That's why I'm starting," Stenhouse said as he traipsed around Beazer Homes' Natomas Field development in a cold midday drizzle. He doubted he would buy immediately, but the lower rates prompted him to start looking at town homes in the low-$200,000 range.
Sacramento's troubled housing market, which has been gaining momentum for several months, got a new jolt this week. An $800 billion stimulus plan for the credit markets, unveiled Tuesday by the Federal Reserve and U.S. Treasury Department, sent fixed-rate mortgages tumbling as much as 1 percentage point.
Almost immediately, homebuyers with deals pending raced to lock in rates. Potential homebuyers called their agents and said they were ready to look in earnest. Homeowners took a fresh look at the refinance market.
It's unlikely this will cure all that ails the real estate market. It won't spell relief for homeowners who've fallen behind on their payments or can't refinance out of an expensive variable-rate mortgage because they owe more than their houses are worth.
Still, the move was seen as helpful. Alan Wagner, president of the Sacramento Association of Realtors, said the lower rates might help firm up the region's housing prices – which have continued to plummet even as the volume of sales has improved. At the very least, the rates will probably bring more buyers out of the woodwork, and soon.
Read the full story at sacbee.com.
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