Laxed Mortgage Rules Boost Alabama's Real Estate Market

By Joe Taylor Jr.
Local Lender Columnist
Jan 22, 2007
It's been a long time since Hurricane Katrina damaged much of the Gulf Coast, sending homeowners inland to start anew. Real estate markets in bordering states like Alabama, which saw the least damage, surged. While mortgage interest rates rose in the Yellowhammer state, brokers are eager help new residents find home financing.

Real estate officials report strong sales in parts of Alabama, but softening prices leave many wondering if the market will cool down in line with national trends. Interest rates on 30-year mortgages are declining, however, so many investors still consider Alabama a hot market.

Demographic Changes Mean Higher Alabama Home Prices

Experts report that more homes are on the market in several Alabama communities, such as Montgomery. Meanwhile, high-priced residential development in Mobile and Birmingham indicate speculators are confident in the region's real estate market. In Baldwin County, for example, the number of units planned for Five Waters on Plash Island has increased from 300 to 400. Some of these homes, priced as high as one million dollars, are unusual for the region.

Continued low interest rates make this a good time to invest in Alabama's housing market. The interest rate for a 30-year fixed rate mortgages is around 6.3%, means it's also a good time for those already paying higher rates to refinance your mortgages. Homeowners across the nation are struggling to avoid foreclosure while adjustable rate mortgage payments are ballooning. Take advantage of the current rates by refinancing to a fixed-rate mortgage to ensure that your payment will not change.

Sources
BusinessWire
Mobile Press-Register
MoneyWeek
Montgomery Advertiser

About the Author
Joe Taylor Jr. has covered business and finance news for Financial Times Television and CNBC. He coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.