Home Loans After the Bubble: The Mortgage Refinance Boom

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National and Florida area market data research shows slow down in first time mortgage loans but a growing trend in refinance and home equity loans.

National indicators show a significant slowdown in the real estate market’s new residential construction rates. According to the US Census Bureau’s “New Residential Construction” report for June 2006, new housing permit issuances dropped 4.3% from May to June. Permit issuances increased in the Northeast only, where a 6.3% growth indicates significant growth in multi-family structure development.

In tandem with slowing real estate metrics, the Federal Deposit Insurance Corp. issued a recent statement indicating it expects mortgage delinquencies to increase over the next few years, particularly for interest only and adjustable rate mortgages.

Despite these disappointing indicators, most real estate and mortgage companies, even in the hottest growth markets, foresee an ongoing growth trend more inline with traditional growth patterns.

“While the market has been explosive over the last few years, we are seeing a general overreaction to market slowdowns,” commented Nabil Dajani, President of Orlando based brokerage firm Homestar Funding. “Many homeowners have had significant equity growth in their homes. With 30-year rates still at relative lows, many homeowners are looking to refinance and convert existing ARMs to a more stable fixed rate.”

http://www.PersonalHomeLoanMortgages.com provides local market research and housing trend information to help buyers make smart market decisions when purchasing a new home. “The hottest markets – Miami, Las Vegas, Phoenix - are obviously going to see a more significant slowdown,” noted David Bayer, President of PersonalHomeLoanMortgages.com. “Nationwide trends still indicate a steady demand for housing development, particularly in warm weather climates.”

Hiccup or Bubble? As investors and speculators begin to withdraw from the market, some experts are concerned about an overload of excess inventory. “If we don’t see any significant hike in interest rates by the Federal Reserve, the retreat of speculative investors should be less pronounced.” A blend of excess inventory and high rates could drive some investors to unload properties below market values, which could have a downward driving effect on the industry as a whole. “Investors who moved into the market too late and overextended themselves may find themselves in a tight position. As a whole, most non-speculative homeowners have been able to enjoy low rates and equity growth. Things just seem to be settling back to ‘normal’.”

For more local housing trends and real estate market information, please visit http://www.personalhomeloanmortgages.com

For more information about Central Florida mortgages including mortgage refinance & home equity loans in Florida, please visit Homestar Funding at http://www.homestarfunding.biz.

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