Is the End Upon Us? We hope so, and the evidence suggests that it is.

This is a good thing, because we are referring to the national foreclosure crisis, which has weighed on the housing recovery (at least it did through mid-2012). RealtyTrac reports that the number of homes in various stages of foreclosure is down to the lowest level since the housing bubble burst.

For most of 2012, we said that the overhang of foreclosures and distressed properties would dissipate. Our rationale was that the issues were well-known and understood. Market participants would actively address the issues, and thus, would rectify them.

That's exactly what's occurred (and is occurring). RealtyTrac also reports foreclosure starts fell to a 79-month low, reaching levels not seen since June 2006.

We expect foreclosures to continue to trend lower. TransUnion finds that the rate of borrowers 60 days or more past due on a mortgage dropped 14%, the largest reduction since the recession ended in mid-2009. Just as encouraging, many of the delinquencies are a result of older vintage loans – borrowers who haven't made payments for an extended time – and are inflating the overall delinquency rate.

We expect housing construction to continue along its trend as well. For-sale inventory – both existing and new – is at a decade low (and possibly a multi-decade low). This points to a rise in construction activity. In fact, Goldman Sachs expects real residential investment to grow at a 10%-to-15% annual rate through 2014. This means we'll also likely see a surge in housing-related employment. Goldman's economic models point to 25,000 new housing-related jobs being formed each month for the next two years.


So the stage is set for an uptick in economic growth. This means mortgage lending rates will be pressured to move higher, thus continuing a trend started last fall.

We look for higher rates because as the economy improves more money will flow out of fixed-income investments – Treasury and mortgage-backed securities – and into riskier investments. We've already seen a surge in stock-market investments. Both the Dow Jones Industrial Average and the S&P 500 are up strongly over the past three months.

The counter argument states that mortgage rates will remain subdued because of the current battle in Congress over sequestration and spending cuts. In other words, market uncertainty is rising, which means investors will be motivated to seek shelter in Treasury and mortgage-backed securities.

This might happen, but its impact would be ephemeral. This big-picture view points to economic growth. Economic growth and continued strength in housing will also force the Federal Reserve to exit its open-ended policy of quantitative easing sooner than expected.

The bottom line is that anyone who can benefit from a refinance or a purchase loan should take advantage of today's rates. The risk/reward paradigm strongly lists toward taking action; it makes little sense to procrastinate at this point.

 Courtesy of Jessica Regan.

Search all Harrisburg PA homes for sale.

When you are buying or selling property in today's Harrisburg PA real estate market, it's important to have confidence in your real estate professional. Don’s commitment as your Harrisburg PA REALTOR® is to provide you with the specialized real estate service you deserve.

When you are an informed buyer or seller, you'll make the best decisions for the most important purchase or sale in your lifetime. That's why Don’s goal is to keep you informed on trends in Harrisburg PA real estate. With property values continuing to rise, real estate is a sound investment for now and for the future.

As a local area expert with knowledge of Harrisburg PA area communities, Don’s objective is to work diligently to assist you in meeting your real estate goals.

If you are considering buying or selling a home or would just like to have additional information about real estate in your area, please don't hesitate to call me at (717) 657-8700, complete my online form, or e-mail me at