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The 2014 Spring Selling Season will be impacted mostly by mortgage rates and the number (and quality) of homes coming to market.

rateswilldictateThe mortgage rates will likely dictate everything, and though thankfully the jumbos are still tracking the conforming rates, it won’t take much for both to get back around 5%.

From the Mortgage Bankers Association:

Rates for jumbo mortgages remain two basis points lower than for the 30-year conforming loan as both increased 10 bps for the week ended Dec. 6, according to the Mortgage Bankers Association.

The average contract rate for the 30-year conforming is at 4.61% and for the 30-year-fixed jumbo it is at 4.59%, the MBA says.

A rate of 5% won’t be the end of the world.  But buyers have a natural expectation of higher rates being reflected in the pricing – and yet sellers will have a hard time resisting the urge to tack on a little extra.

The super-premium properties won’t have much trouble selling.  The impact will be felt in the ‘tweeners’ – the homes that aren’t fixers, but are in between.  Their locations are so-so, condition is average to dated, and in general just not anything too special about them.

The tweeners got picked up in the frenzy, as buyers were is such a rush that they overlooked things they shouldn’t have.  Without frenzy conditions, that won’t happen again – will it?

The housing stats in news have been fairly negative, and the foreclosure crisis is apparently over.  Without a frenzy-push to ignite the market, there should be plenty of hesitation on both sides in early-Spring.

Rates will probably be a deciding factor for many buyers on whether to pay more, or wait.  Where will they be in a couple of months – especially when dancing around the Fed-taper question?

Susan said this morning, “Rates are following the 10 year treasury yield.  This morning as I type it’s up to 2.89.  As soon as we are over 3.0, I’m afraid there’s no looking back!”

http://www.marketwatch.com/investing/bond/10_year/charts?symb=1

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