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Fewer Home Sellers Cut Prices in February as Interest Rates Drop

Posted by Jim Sparrow on Thursday, March 25th, 2010 at 6:50am.

US interest rate drop

Today's guest blogger is Eric Bramlett, who is the broker & co-owner of One Source Realty, a boutique Austin real estate brokerage. Eric currently manages his team of agents, and a number of websites, including his Austin condos website. 

According to reports, the percentage of home sellers in the United States who reduced their asking prices fell during the month of February. Furthermore, those who did reduce their prices reduced them at a slightly smaller rate than what has been seen in the past. At the same time, it should be noted that the median list price of homes did fall in January.

Some interesting facts as reported by the website include:

• 19.5% of homes listed for sale on Zillow were reduced in price at least one time by the end of February as opposed to 19.8% in January.
• Home prices were reduced by a median of 6.7% in February as opposed to 6.8% in January.
• 33.2% of homes listed on Zillow saw a price reduction in February of 2009, while the median price reduction was 8.7%.
• The median list prices of homes fell 1.4% from January to February.
• The median list price of homes in February was $205,000, which is down by 6.8% when compared to February of 2009.
• In January, homes were on the market for a median of 109 days. This fell to 105 days in February. In February 2009, the median was 109 days.

According to the Mortgage Bankers Association, U.S. mortgage rates are also on the decline. In fact, just last week, they fell below 5%. This decrease came in response to the number of purchase applications received in the previous week, which fell to the lowest they have been in 13 years.

Many experts blame the uncertainty surrounding the housing tax credit coupled with the unusually harsh winter for January's slump in housing sales, but this was followed up by volatile swings in housing demand in February. In fact, during the week that ended on February 26, requests for loans to purchase homes and to refinance actually rose by a seasonally adjusted 14.6%. This figure represented the highest level seen since mid-December.

While purchase applications increased by 9%, requests for refinancing jumped by 17.2%. Given that 30-year mortgage rates fell to 4.95%, which represents a 0.08% drop, it is certainly understandable. The low rates aren’t expected to last for long, however, as many experts predict that the rates will climb to as high as 6% after the March 1, which is when the Federal Reserve will be putting an end to its $1.25 trillion mortgage bond purchasing initiative.

If you're looking to sell or buy, do not hesitate to contact us.

We are prepared to work hard ensuring that your needs are met and that the result is more than you were hoping for. Nothing gives us more pleasure than your success and being with you through major life changes.

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