La Jolla Real Estate Blog: Coldwell Banker & Realogy Propose Buy-Down in Mortgage Rates

I am a Coldwell Banker real estate agent and today our company announced that Realogy (our parent company) has approached the U.S. Department of Treasury with the call to lower rates from 4.5% or lower on 30 year fixed rates mortgages.

"There are millions of credit-worthy people ready to jump back into the housing market, but they need to be motivated," said Realogy President and CEO Richard A. Smith. "In our view, the incentive of substantially lower mortgage rates would directly stimulate the housing market - both in sales volume and price - and thus accelerate the overall U.S. economic recovery."

Realogy's proposal calls for a short-term government buy-down of mortgage rates to at least 4.5%, or lower, for a 30-year fixed rate mortgage (down from current rates of approximately 6.04%). This homebuyer incentive would apply to the purchase of all new and/or existing homes sold up to $1 million in price.

Here are the key findings from the Realogy broker survey:

• 95% of brokers said they would expect an increase in home sales if 30-year conforming fixed-rate mortgages were available at 4.5% rates today.
• Most notably, 54% of all responding brokers said the impact of a 4.5% mortgage rate would significantly increase home sales in their markets.
• Of the brokers who answered that rates would increase, nearly half (46%) indicated that they would anticipate unit sales levels to increase between 10% to 25% if 4.5% mortgage rates were available today.  

The majority of brokers also agreed that substantially lower mortgage rates would have a strong stabilizing impact on average home sales prices.

• 51% of brokers felt home prices would increase somewhat and 38% felt home prices would stay the same.
• Of the brokers who felt prices would increase or significantly increase due to 4.5% mortgage rates, 22% felt the home price increases would be in the 3% to 5% range and 13% felt it would be in the 5% to 7.5% range.

About Realogy Corporation

Realogy Corporation, a global provider of real estate and relocation services, has a diversified business model that includes real estate franchising, brokerage, relocation and title services. Realogy's world-renowned brands and business units include Better Homes and Gardens® Real Estate, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, The Corcoran Group®, ERA®, Sotheby's International Realty®, NRT LLC, Cartus and Title Resource Group. Collectively, Realogy's franchise systems have approximately 16,000 offices and 300,000 sales associates doing business in 92 countries around the world. Headquartered in Parsippany, N.J., Realogy (www.realogy.com) has approximately 13,000 employees worldwide. Realogy is owned by affiliates of Apollo Management, L.P., a leading private equity and capital markets investor.

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Copyright  © 2008 Susan Laxson. All Rights Reserved. "Coldwell Banker & Realogy Propose Buy-Down in Mortgage Rates".  Information from sources deemed reliable, but not guaranteed.