Mortgage Turmoil May Yield Nevada Bargains

By Richard Barrington
Local Lender Columnist
Apr 4, 2007
Problems with subprime mortgages have dominated the financial news recently, as acceleration in delinquencies and defaults has fueled concern about the direction of the housing market. If you've been waiting for the hot Nevada real estate market to ease up enough to create a buying opportunity, the latest housing market troubles might combine with an existing trend toward lower mortgage rates to give you your chance.

Mortgage Interest Rates Are Lower Than Last Year

Interest rates are already giving buyers a break. According to national mortgage finance company Freddie Mac, mortgage rates held steady at 6.14% during the reporting period ending March 15, 2007. This is more than a quarter of a percentage point lower than the average interest rate for last year (figures for both periods assume 0.5% in points at closing).

Outlook for Nevada

With sub prime mortgage problems putting a damper on a significant portion of the lending market, demand for housing might cool nationally, leading to lower prices. This national trend is forecasted to carry over to Nevada, which has been one of the stronger real estate markets.

The Nevada Association of Realtors forecasts that housing sales volume will decline 12% to 18% statewide in 2007, with a 7% to 10% decline in prices.

Keep Your Eyes Open and Your Credit Healthy

If you are hunting for real estate bargains in Nevada, you should start watching to see if this trend plays out in your target area. Meanwhile, pay special attention to keeping your credit rating healthy. Troubles with sub prime loans will make mortgages harder to come by for people with troubled credit histories. To the extent mortgages are still available to lower-rated borrowers; they will come at a steep price in the form of higher interest rates.

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.