10 Reasons the Housing Market Will Begin to Recover 2nd Quarter 2008

1. The Federal Open Market Committee (FOMC) Will Continue to Lower Interest Rates - This will continue stimulating the economy, keeping unemployment low in addition to helping ARMs reset to lower interest rate.



2. The Economy is Creating Jobs and Unemployment is Low - The last two housing downturns were due to recessions in the U.S. economy (80-81, 90-94)



3. Lenders are Helping Homeowners with Loan Modifications on ARM Resets - This will decrease the number of homeowners needing to sell or going into foreclosure



4. Subprime ARM Resets Peak in 1st Quarter 2008 with Minimum Resets by Year End - The credit markets froze in fear of these resets. Once past, more credit markets will make money available



5. Home Builders are Dumping Standing Inventory to Remove Inventory off the Books by Year End - The competition to the resale market will be greatly reduced



6. Sellers of Existing Homes Will Take Their Homes Off the Market at Year-End that Don’t Need to be Sold - Combining this with those that need to sell and lowering their sales prices during the holiday slow period, will cause the months to sell inventory to come down



7. Credit Markets for Jumbo Financing are Opening Up - The spread of interest rates between conforming and jumbo has been greatly reduced. Many programs are still available making it easy for buyers to qualify



8. Fires in So. California Will Create Construction Jobs and Help Supporting Industries - California has been losing jobs in this area. This in itself will keep a cap on the unemployment rate. Furniture, appliances, landscaping and architects will benefit



9. Real Estate Investors are Stepping Up and Making Offers - Mostly absent in 2007, Real Estate investors are stepping up to take advantage of the foreclosures and lowered prices



10. Buyer Sentiment of Those Waiting Will Change as Foreclosure Reporting Lessens - There are so many buyers just waiting for a sign as they fear prices will continue down. The sign will be decreasing foreclosures and inventory time to sell reduced and reported by the media

Information provided by: Kevin Budde, Branch Manager Countrywide Home Loans. Kevin Budde has been in the mortgage industry since 1975 in Orange County.