Three Things You Need To Know
by Craig Goebbel
President & CEO, LoanTek, Inc.

The Economy

It has been an eventful week if you like to follow interest rates and real estate trends. As I write this column the capital markets are shrugging off the Gross Domestic Product numbers from the first quarter. These numbers were very strong at 5.8%, the fastest pace in two years. Why did the market shrug off these numbers? Because most of the gain was weighted towards the first two months of the quarter and consumer spending is not heating up. The consumer spending number was reinforced by the release of the University of Michigan's consumer sentiment index which decreased to 93 from 95.7 in March. Last but not lease inflation is in check and this is a good thing.

What does this mean for you? The current rate environment will likely be here for a while.

Sluggish Sales and a Sellers Market?

Home sales were more than a little sluggish in the month of March. Nationally, sales declined 8.3% from the prior month. Even with this decline the nations REALTORS are predicting another great year for home sales. Locally, sales are sluggish in the upper ranges but we have a severe shortage of inventory for first time homebuyers. I surveyed several REALTORS this past week and they all have qualified buyers seeking their first home but there is very little inventory in this market.

What does this mean for you? If you are one of those buyers looking for your first home, be ready to jump when your REALTOR calls and says they have a home they want you to see. If you are not already credit approved and ready to move on a good deal, you better get out of the way of those who are.

If you are still in your first home and are thinking of moving up there has never been a better time to put your home on the market. It is truly a sellers market for those who are in the first time buyer price range.

Interest Rates

A quick glance at the chart on the left will tell you rates dropped again last week. Although the chart is based on what happened last week, the good news is this trend will likely continue. It is easy to find a low cost 30-year loan in the 6.75% range. Will rates continue to decline? I don’t know but with uncertainty in the Middle East and its impact on the price of oil I don’t think there will be much more of a drop in rates, if any. Besides, any real drop in rates from here will create a literal stampede of mortgage applications and only the early birds will get to take advantage.

© 1999 - 2004 LoanTek

Craig Goebbel is President and CEO of LoanTek.com, mortgage loan brokerage.  He is also producer and host of Real Estate Radio Show, a Seattle-based talk show featuring mortgage and real estate news, interviews and listener calls. It is broadcast on KVI Radio AM 570 in Seattle, Washington. Past show are also webcast via the Internet at http://www.realestateradio.net.

Real Estate Radio Sponsor

Real Estate Radio with Goebbel and Gray is the leading real estate radio talk show in the world and is hosted by Real Estate home mortgage expert Craig Goebbel, owner of LoanTek Home Loans and Robb Gray of John L. Scott Real Estate.