Despite the fact that mortgage rates in the United States are nearing their lowest in almost 40 years, homeowners and homebuyers are waiting for rates to fall even further before they refinance or buy new homes.
The reasons for the delay, real estate professionals say, are that buyers are concerned about job security, banks are being much more diligent about checking homebuyer qualifications, and homeowners are hesitant about refinancing.
“Because of the economy people are afraid to spend but there is always a chance that they may wait too long,” said Sharon Fiscaletti, associate broker with Serls Prime Properties, based in LaGrangeville, New York.
The unprecedented combination of a bad economy, low mortgage rates, a glut of available houses, and bargains galore for buyers, seems tailor-made for online real estate firms such as Zillow and Trulia to attract visitors.
“This is an excellent opportunity for online real estate firms to become a kind of feedback mechanism for consumers,” said Greg Sterling, an analyst with Sterling Market Intelligence.
To date consumers get basic rate data from a number of sources, but for more in-depth analysis of the housing or mortgage markets, they depend on television experts on stations such as CNBC and MSNBC.
And because much of the expert information available on TV is designed for national audiences, consumers in local markets are confused as to whether they should pull the trigger or wait for the market to get better.
“People are taking their cues from CNBC and other TV stations and sitting on the fence. They are being told that rates will go down to 4.5 percent so they are waiting despite the fact that 5.25 percent is a great rate,” said Mike Waters, branch manager at Wells Fargo.
The current market has created a vacuum for resources that offer survey-style feedback data that is tuned to various geographies. The dynamics of the real estate market vary dramatically from region to region across the country.
Online real estate firms, such as Zillow and Trulia, are uniquely positioned. They generate revenue from advertising, and they are privy to an immense amount of data which they can parse and manipulate in unprecedented ways.
Zillow’s eight month old Mortgage Marketplace is a digital meeting place for borrowers and lenders, so Zillow is particularly well positioned to gather finely-tuned mortgage-related data that could help consumers, Mr. Sterling said. (Zillow Hosts Mortgage Open House)
“If these lower rates trigger a wave of refinancing and new home purchases, it could be of major benefit for online sites, if they make themselves part of the wave,” Mr. Sterling said.