Investor Intel: Is There a Housing Bubble?
If any housing bubbles exist, they are local in nature, not national, says CNBC contributor Ron Insana, who suggests housing commentators need to settle down because “this is not an ‘all in’ moment on the housing front.”
Insana says that while average home prices in 20 major metros are above their 2007 peak prices and while a few metros are overpriced, that doesn’t make for a national housing bubble.
The still-tight credit market and an absence of the risky lending products, widely available to credit-challenged borrowers in the run-up of the last bubble, have kept the market in check, he says.
Still, it’s a seller’s market, which means it may be a bit more challenging for real estate investors trying to find a great deal, but it’s certainly not impossible.
The inventory of available homes for sale dropped to the lowest levels since January 1999 last month, according to Trulia.com, a San Francisco-based real estate research site. That means residential real estate investors, in certain markets, can expect more competition for available homes and higher prices.
The good news is that mortgage rates, although they’ve ticked up slightly, remain incredibly affordable and near yearly lows for real estate investors who want to finance their residential real estate investments.
Mortgage giant Freddie Mac said the average for the benchmark 30-year fixed-rate mortgage was 3.46 percent this week, up from 3.43 percent last week, but down from 3.89 percent a year ago. Real estate investors will be glad to know that current rates are pretty close to their all-time low of 3.31 percent in November 2012.
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