Maryland Home Equity Loans

Maryland has the fourth best housing value appreciation rate in the nation. . Consequently, many homeowners cashed in on their home equity to take advantage of the historically low interest rates.

Maryland Mortgage

The Maryland mortgage industry was very strong in the year 2003. The extremely low interest rates boosted the sales of homes in Baltimore. Approximately 39,372 existing homes were sold in Baltimore and its five surrounding counties in 2003, about 6.07% more than in 2002. The average sales price in the region was $228,328 in December 2003, and that is a 17.36% increase compared to December 2002. The real estate market was at the forefront of the region's economy for the last three years. The sales of homes and prices have increased consistently, thus providing more equity to homeowners which in turn raised real estate tax assessments. The increasing number of refinances helped consumers lower their monthly mortgage payments and this allowed them to tap into their home's equity and make up for the stock market losses.

The rapidly rising prices normally would discourage first time buyers looking for a home, but the demand for homes has not slowed. In December 2003, it is estimated that buyers purchased 3,359 homes, which is a 15.95% increase compared with December 2002. The interest rates on 30-year mortgages averaged about 5.8% in 2003, according to the Mortgage Bankers Association of America. Economists rank Baltimore as the seventh most overpriced market in the nation. If the economy improves, the mortgage rates may rise, and the housing market will slow down. The rapidly increasing prices in Baltimore can be ascribed to factors like:

· Low interest rates
· Limited inventory of homes
· Building limits in many jurisdictions
· Stable job market

Figures from the mortgage industry show that the average home in Baltimore took 52 days to sell in December 2003, six days less than in December 2002. About 6,145 homes were for sale in Baltimore in December 2003, which is about 8.57% less than in the previous year. According to the figures released by the Maryland Association of Realtors, the monthly affordability index showed that the first-time buyer earned 68.2 percent of the income needed to buy a typical starter home in November. Leaders in the industry and several economists worry that price growth has far exceeded income growth, and that the market would catch up with income levels in the future.

Maryland Home Equity Loans

Due to the increasing values on their homes, more and more people took out a Maryland home equity loans . Homeowners in Maryland have seen an average increase of $57,900 in home equity during the past two years, according to the National Association of Realtors. The median price of a home in Baltimore was $220,200 at the end of September 2003. The high appreciation in the home values is a result of the extremely low interest rates and the high demand for homes. In fact, in June 2003, the average mortgage rate was 5.21% for a 30-year fixed-rate mortgage. Most lenders are targeting minority and immigrant homebuyers, given government efforts to expand homeownership. If the interest rates increase this year, those with variable rate loans, with credit card debts and with those who cashed on their home equity would suffer. An increase in the interest rates would mean a fall in the home prices. If the homeowner's income is diminished, they will have little equity in their homes and lenders would not provide funding.

Maryland Second Mortgage

The Maryland second mortgage industry was doing well, because of the low interest rates and the high home values. The values of homes in Maryland are rising at the fastest rate in over a dozen years, according to state officials. The high prices for big, expensive homes, especially in waterfront areas are at the forefront. The largest changes are in Worcester, Montgomery and Anne Arundel Counties. Contrastingly, Allegany County, which is less prosperous, has had the lowest increase at 3.5%. Baltimore City and Baltimore County showed increases at levels, which are just over the state average. This is due to the fact that these areas included older and lower-income neighborhoods as well as some of the hottest markets. The suburbs of Baltimore are growing faster and doing better. As an example, there was 16.3 percent increase in Anne Arundel County, 13.1 percent increase in Howard, 12 percent in Carroll, and 11.2 percent in Frederick. The rural north was assessed in Harford County, where the increase was 8.5 percent.

In the state of Maryland, one-third of the properties in each of the 24 jurisdictions are assessed, and taxes on the new values are phased in over a three-year period. The increase in values of the homes have also helped the economy as homeowners refinanced their mortgages this year to take advantage of lower interest rates. Though home sales may slow down in 2004, the trend in higher values is expected to continue. Commercial property sales are sluggish and even lower priced homes are becoming more expensive.