We.ve seen a solid increase in St. Louis real estate sales this year. Lawrence Yun, chief economist of the National Association of Realtors is predicting a 20% increase in home sales for the first half of 2010. We can count on 2.6 million home purhcasers taking advantage of the credit. Yun admits that his prediction is assuming that we will continue to see historically low interest rates of around 5.0 to 5.5% — for today’s rates contact my mortgage partner Matt Eversgerd of Stifel Bank at 314-620-7227.
Currently, the Fed plans to end its purchase of Mortgage Backed Securities. We will see rates rise on this action. But we shouldn’t see rates go through the roof — they will likely land in the high 5s. The rate change from today’s 4.875 for 30 year fixed rate money to the likely 5.875% we will see in 2010, means that every $100,000 that you borrow will cost you an additional $60 per month.
For example, a $250,000 loan today has a principal and interest payment of $1324. If rates increase a full percentage point, as expected by mid-2010, that same loan amount will cost you $1480.
I’m optimistic about 2010. Throughout this past year the St. Louis real estate market has had it’s ups and downs, but my sense is that our outlook is better than it was a year ago.
One of the reasons for my optimism…. During 2008 and 2009, while the overall St. Louis transaction volume sank by 30%, mine went up. I’ve sold 80 homes during the 08/09 decline. So, Nolting Real Estate is doing something right for St. Louis real estate buyers and sellers. Check us out.
