boston real estate blog   
Sponsored by Ford Realty Inc.
137 Charles Street, Boston
realtyford@yahoo.com
617-595-3712
617-720-5454
151 Tremont Street
617-482-0010
boston real estate blog
| Home | Search Boston Condos | Search Boston Rentals | Buying
Real Estate
| Selling
Real Estate
| About Us | Contact Us



Low mortgage rates may partly explain low inventory

Scott has an interesting post that may partly explain why there’s such a low inventory of homes on the market: Low mortgages rates.

Basically, it boils down to many homeowners not wanting to sell if it means losing their super-low mortgage rates. As one of Scott’s readers puts it: “No way will I give up my 3.25% mortgage, without some very compelling reasons.”

The phenomenon, called “lock-in,” is quite serious, according to a recent study by DePaul University’s Institute for Housing Studies.

So let’s get this straight: A monetary policy of low interest rates designed, in part, to spur housing and economic activity is actually causing slower housing and economic activity.

Makes sense to us!

File under: Damned if you do, damned if you don’t

Read other posts about: General Housing News

One Response to “Low mortgage rates may partly explain low inventory” »»

  1. Comment by warren currier | 03/18/14 at 5:12 am

    The banks are making it very hard to get a loan. Recently I did a couple of refi’s and after many many months (March 2013 to Oct. 2013) was pleased that I got 3.125% (fixed) on an investment property and 2.875% (fixed) on the place I live. Perfect payment/credit history, same bank (BAC) now I’m looking to buy a place for $945K with a $700K down payment !! yet the bank is drilling down deep to find reasons (it seems) to not lend me the $245K. Regardless of having more than that in savings, steady employment, good credit, etc. recently, they seem expert in having new people in the company contact me to say that he/she is my primary point of contact and that he/she is standing by to serve me: “Whatever” I say, “Give me the loan or I walk!” (they don’t care if I walk)

    That there are low rates is great for those who can get a closing.

    I feel that the banks know that huge inflation is coming…

    During times of huge inflation it is better to owe money than it is to be owed money.

    Personally, I look for a low fixed rate with a 10-15year term, and then I check to see if I can rent the place out for about what is due each month. (I figure ‘the value’ by how much cash the place can generate each month)

    Over time rents will go up as will taxes. But I want to own the place ‘free and clear’ and be able to pocket every dollar over whats due for taxes. I can repair the place myself.

    There are always going to be sellers. Sometimes you need to knock on some doors to find them– otherwise– you can wait for open-houses and go with the herd.
    But be prepared to act fast.

    People will sell these days even with these low rates for no other reason than that they expect to get a new loan with a low rate.

    One guy says: “No way will I give up my 3.25% mortgage, without some very compelling reasons.”

    As reported one still needs to know: 1. What is your LTV? 2. Is your loan fixed or adjustable? 3.What if you lose your job, can you get another? 4. What percentage of your monthly earnings goes to your PITI, Principle, Interest, Taxes, Insurance? 5. Do you have at least 12X your monthly expenses in cash?

    There will be many many more sellers in the years ahead as the entire system goes through major convulsions.

Leave a Reply »»

Comments may be moderated, edited or deleted; by leaving a comment, you are agreeing to the Terms of Service of this website.

Let's talk Boston real estate. The most recent real estate comments

  • Tyler Mills, Lenders go into overdrive to clear out backlog of delinquent mortgages: Instead of forcing out the...
  • warren currier, ‘Boston’s faux housing boom’: Scott, Do you own any units in Boston? Supply /...
  • Nishant, Major Developers: Affordable homes can only be built outside downtown Boston: Yes, this is correct that...
  • warren currier, Done deal: Dr. Dre buys Tom and Gisele’s mansion for $40M: The property is located in LosAngeles,...
  • JS, Despite predictions, inventory of homes for sale continues to fall in Mass.: One thing that could be holding...
  • dcmhomebuyers, For 74 Beacon Street, it was the kitchen, stupid: Nice house. I think front section to location of...
  • Johnd478, Five signs you’re a ‘renter for life’: I just couldnt depart your site prior to...
  • Dionis Padron, Downtown condo prices now averaging near $1 million each: great article but prices for standalone...
  • John Ford, Charles Ponzi’s old Lexington home for sale at $3.3M: That’s a great idea. Anyone have an idea how...
  • Rich, Charles Ponzi’s old Lexington home for sale at $3.3M: Speaking of Mr. Ponzi, he ran his Ponzi scheme out of an...
  • amparo bracero, Big changes in store for Tremont Street?: I will love to comunicated my self with aida I was one of...
  • warren currier, Low mortgage rates may partly explain low inventory: The banks are making it very hard to get a loan....
  • Kiki, ‘Our biggest impediment’: Inventory: A quick maybe unrelated question. What’s a typical or...
  • JS, Hey, let’s tear down most of downtown Boston for the Olympics: I agree, and I resent the commission describing us...
  • PROPERTY MANAGEMENT COMPANIES in Carlsbad CA, ‘Our biggest impediment’: Inventory: good blog
  • Phoenix property management, Blog: As you may have noticed I am having problems with the comment section of the blog....
  • Phoenix property management, Get your very own ‘mushroom house’: Good post. i like it so much.
  • Phoenix property management, Get your very own ‘mushroom house’: Good post. I like it
  • PROPERTY MANAGEMENT COMPANIES in Carlsbad CA, California dreamin’ on such a winter’s day …: Good post...
  • Borris C., ‘Friendly competition’ keeps Seaport rents as high as possible: Sounds like good old-fashioned collusion...

  • Join us on Facebook Subscribe To FeedBurner Follow us on twitter Newsletter sign-up

    Welcome

    Are you considering the purchase or sale of a home in Boston?

    Contact us today to discuss ways we can help make the experience easy and stress-free.



    Search past blog entries





    Site tools


    Add To Google      Subscribe To FeedBurner

    Add To My Yahoo!

    | | | |





    Boston Real Estate/Boston Condos for Sale -
    Search MLS

    Select property type:
    Select area:
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
    Select property size:
    Price from:
    Price to:
    MLS #



    Boston Real Estate and Boston Condos

    Click on the links below for Boston condo neighborhood sales listings

    Boston Back Bay Condos

    Beacon Hill Condos

    Boston Charlestown Condos

    Fenway Boston Condos

    Boston South End Condos

    ----------