The biggest news for St. Louis and national real estate this week is coming from the mortgage industry. Mortgage interest rates have dropped below 4% for a conventional 30 year fixed-rate loan. While the vast majority of loan applications are for refinances, we are seeing a pick up in purchase activity as a result.

With inventory holding steady and pending sales increasing slightly, the data found on the Nolting Report points to good news this week. In fact, our months of inventory average number has now dipped into the 6 – 7 range for the first time in a long while. While this number still indicates a buyer’s market, it is awfully close to a balanced market. I’m continuing to expect a healthy fall sales season as buyers who waited out the summer’s political and economic troubles (debt ceiling debate, downgrade of the economy by Standard and Poor’s) finally decide to get back in the market.

Within the last 7 days, Active Listings have dropped from 3993 to 3931 as many listing agreements expired on the last day of August.  We also saw a large number of end of the month closings, resulting in a our Pending number dropping from 1011 to 937.  This week should show a healthy beginning of the fall market in St. Louis as continued low interest rates push those who have been sitting on the sidelines onto the playing field.

According to Fox News, The Federal Housing Agency, which oversees U.S. mortgage giants Fannie Mae and Freddie Mac is preparing to file suit against more than a dozen big banks.

“The suits– which seek billion in compensation– allege that lenders including Bank of America, JPMorgan Chase, Goldman Sachs and Deutsche Bank inaccurately represented the mortgage securities they put together and sold during the housing bubble.”

This recent word of suit has affected the stock market significantly.  This could possibly be one of the largest lawsuits in U.S. history if these companies are deemed responsible.  The Russell Nolting Group will keep you updated as to what the outcome out this lawsuit will mean and how it will affect the St. Louis Real Estate Market.

In this week’s St. Louis Real Estate update, there has been a slight decline in the number of active listings and month of inventory. This could be a direct result of people getting back into the swing of “school time” for their children putting the real estate market on the back burner. Although, with interest rates still at record lows there should be an increase in houses being sold for the next coming months. If you are a seller in this economy the good news is that the sellers that are motivated to sell there home have taken their property off the market. Therefore, giving those motivated sellers more of an advantage to selling their home.

This week’s slide in the number of Pending Contracts in St. Louis is  accompanied by a reduction in the number of ACTIVE listings.  In fact,  from a statistical standpoint, your home continues to have the same  statistical likelihood of being selected by the buyer pool — fewer  buyers have fewer homes to choose from.  Typical expectations for the  2nd half of August — showings tend to be on the slow side as families  focus on getting their kids back to school.  After Labor Day, we start  to see a pick up as families begin to focus on moving prior to the  holidays.  Of course, the highest quality buyer — the one who NEEDS to  find something — is always out there regardless of the time of year.

This week’s slide in the number of Pending Contracts in St. Louis is accompanied by a reduction in the number of ACTIVE listings.  In fact, from a statistical standpoint, your home continues to have the same statistical likelihood of being selected by the buyer pool — fewer buyers have fewer homes to choose from.  Typical expectations for the 2nd half of August — showings tend to be on the slow side as families focus on getting their kids back to school.  After Labor Day, we start to see a pick up as families begin to focus on moving prior to the holidays.  Of course, the highest quality buyer — the one who NEEDS to find something — is always out there regardless of the time of year.

According to the Associated Press in Washington DC the Standard & Poor’s Ratings Services on Monday downgraded the credit ratings of Fannie Mae and Freddie Mac and other agencies linked to long-term U.S debt.

The agency also lowered the ratings for: farm lenders; long-term U.S. government-backed debt issued by 32 banks and credit unions; and three major clearinghouses, which are used to execute trades of stocks, bonds and options. All the downgrades were from AAA to AA+, reflecting the same downgrade S&P made of long-term U.S. government debt on Friday.

The downgrades of the US credit rating from a AAA to AA+ means that the collective pool of risk in the United States is viewed as slightly riskier than it was in the past. The Federal debt will be repriced to match this higher risk with higher interest rates.

Monday’s downgrades of the mortgage giants Fannie and Freddie reflected their “direct reliance” on the U.S. government, S&P said.

Fannie and Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans worth more than $5 trillion. As part of a nationalized system, they account for nearly all new mortgage loans. Their downgrade might force anyone looking to buy a home to pay higher mortgage rates.

Neither have commented on whether or not the credit rating from AAA to AA+ will effect there interest rates, but it is something to watch out for in the near future for first time home buyers. Still, mortgage rates will likely stay low and might  hit new record lows in the next few weeks. Debt issued by the nationalized  mortgage-finance companies is still an attractive option for skittish traders  looking for relatively safe investments.

Many commercial banks also are loaded down with  Fannie and Freddie debt, which could prompt them to raise more money and  constrain new lending to consumers and businesses. That could mean tougher  lending requirements for would-be buyers. In a bear market like today, it is imperative to have great representation. That is why at the Russell Nolting Group, Powered by Keller Williams, we study the St. Louis real estate market day in and day out to have to best knowledge of how to sell your home for the best price, and find the house you’ve always dreamed of. Call Russell at 314-677-6560.

The St. Louis real estate market took an expected hit last week.  Concerns about the financial stability of our country, back-to-school seasonal issues, and continued heat-dome weather contributed to reduced showings, offers, and contracts.  The good news is all over the media:  Interest rates continue to be at record-breaking lows!  Buyers will choose homes that are aggressively priced and move-in ready. For any information about your next home, please call Russell Nolting at 314-677-6560

According to a USA Today article, written by Sandra Block, “if you’re considering buying a home or planning to refinance, here’s some advice: lock in a mortgage rate. Now.”

Mortgage rates, which have been at historic lows for months, could shoot higher if lawmakers fail to reach an agreement to raise the debt ceiling by Tuesday, says Greg McBride, senior financial analyst for Bankrate.com.

A government default would cause Treasury bond prices to plummet, and yields would rise. “Uncle Sam’s borrowing rate is the baseline from which all consumer and business borrowing rates are determined,” McBride says. “If Uncle Sam’s costs go up, borrowing costs go up for everybody.”

Even if the default is short-lived, the ratings agencies have signaled they’ll downgrade U.S. debt. That would also drive up consumer rates, because the government would be forced to pay higher rates to bond investors.

So far, the debt-ceiling fracas hasn’t affected mortgage rates. The average rate for a 30-year fixed-rate mortgage for the week ended July 28 was 4.55%, only slightly higher than a week earlier, according to Freddie Mac. Rates slipped on Friday after the Commerce Department reported that the economy grew at a lower-than-expected 1.3% in the second quarter.

It is also even more important to have a great real estate agent when looking for a new home. St. Louis has low rates on mortgage’s and this would be a great time to lock into a low fixed mortgage rate now!  Russell Nolting is a dedicated listing specialist who can help price and sell home’s for his clients that are looking to move to or from the St. Louis real estate area.  Check out Russell’s home buyer’s search site. For any questions do not hesitate to call him at 314-677-6560.