Understanding mortgage market trends is akin to understanding the stock market. It takes keen insight and good instinct to know when to buy and sell homes. The mortgage market is both a local and national phenomenon, and it isn't always driven by mortgage interest rates. Some of the factors are the willingness of lenders to issue home loans, the desirability of a location, the local job pool, schools and more. If you are looking to sell or buy a home, then the local market needs to be studied. Learning national mortgage markets depends more on viewing home loans as an investment tool, such as buying stocks.





Local mortgage market trends take as much study as learning how the national mortgage market operates. You need to start with the actual area you are interested in. Is it a large city with various neighborhoods, or is it a small town with a balanced standard of living across the board? Home prices in a location where there is little crime, good jobs and schools tend to have a steady market. There isn't much effort required to understand a small town market. A large metropolitan area such as Chicago or New York is quite different. Neighborhoods literally change within one street of each other, creating noticeable cost discrepancies. While it is not impossible to determine which areas hold value and which ones don't, it does make it more difficult to buy a home if you're not familiar with the area.





Researching local markets requires putting your ear to the ground, asking questions, finding local forums and keeping an open mind. You don't want to get a home loan for what seems to be an ideal property at an awesome price only to find out a month later that there's a reason the price was too good to be true.





There is no one central source for national mortgage trends, making it trickier to determine when and where is a good time to buy. What was true one minute becomes invalid the next due to a shift in federal policy or government-backed entities lowering the conforming limit for housing. An increase of .25 in the prime interest rate from the Federal Reserve drives up mortgage interest rates, which directly impacts home loans. Again, research is the key to success. The best source of information for national trends is financial institutions that are unaffiliated with housing organizations. They provide unbiased information as well as giving out informed answers to questions. Groups such as the National Association of Realtors also give out forecasts, but organizations such as NAR tend to be a little too optimistic at times and aren't always accurate.





Always remember that mortgage market trends are not written in stone. Take the information and apply it to your situation as best as you can. You may find that you purchase a home in a manner that bucks all trends.