WeeklyBasis 02/12/07: Zillow Hits the Real Estate Market

Fixed and ARM rates are about even for the third week in a row, which is surprising considering that economic data is still coming in strong. When the economy grows too quickly, it causes inflation, and inflation means the Fed hikes rates to slow things down. On Wednesday, we’ll see what the Fed is thinking when chairman Ben Bernanke gives Congress his economic update. I think Bernanke won’t spook markets with threats of rate hikes because, ironically, housing is still the Achilles heel of this current economic growth spurt. He seems to hold the theory that weaker housing and stronger equity markets will each eventually even out as long as rates aren’t prohibitively high. Also, for those who missed it, here’s a Fortune Magazine article about Zillow, the increasingly popular home-price website. Zillow was founded by the two Microsoft execs that created Expedia, the website that made travel agents obsolete. The article explains that, for now, Zillow isn’t the same threat to Realtors because “Realtors are less like travel agents than attorneys.” However, Zillow cannot be ignored and will certainly influence real estate transactions in some way. This article is the best I’ve seen so far exploring emerging trends in our business.

Conforming ($200,000 – $417,000) – NO POINTS
30 Year: 6.25% (6.39% APR)
10/1 ARM: 6.5% (6.64% APR)
5/1 ARM: 6.25% (6.4% APR)

Jumbo ($417,001 – $650,000) – NO POINTS
30 Year: 6.375% (6.515% APR)
10/1 ARM: 6.5% (6.64% APR)
5/1 ARM: 6.25% (6.4% APR)