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Five home-buying trends for watch for in summer 2011

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It’s common knowledge the current housing market works in the buyer’s favor. But that might be painting the picture too broadly.

Polyana de Costa of bankrate.com points out five trends to look for during the summer 2011 home-buying season. Some of them might surprise you.

Mortgage rates are unlikely to go lower: “Mortgage rates are near record lows, but some mortgage experts say the party won’t last long as they expect rates to climb in the next few months. They don’t foresee a major spike, but rather an adjustment to bring them back to ‘normal’ levels.”

In many markets, owning is cheaper than renting: “Falling home prices and near record-low mortgage interest rates are making it more affordable to own rather than to rent in many areas … Yet, homeownership levels are lower than they were more than a decade ago as more homeowners become renters.”

Foreclosures will continue: “Homebuyers in search of bargains who are willing to do some remodeling have plenty to choose from as lenders try to unload a vast inventory of foreclosed homes. In the first three months of the year, bank-owned properties (and properties that are in some stage of foreclosure) sold for about 27% below the average sales prices of properties not in foreclosure, according to RealtyTrac.”

The return of adjustable-rate mortgages: “In 2005, ARMs accounted for more than a third (34.9%) of mortgages originated. That share dropped to less than 1 percent in late 2008 when the mortgage market collapsed, according to the Mortgage Bankers Association. It’s now back to about 6%.”

Jumbo loans are coming back, too: “Those who live in pricey housing markets or are thinking of upgrading to fancier homes are finding it “less difficult” to get jumbo mortgages these days, says David Adamo of Luxury Mortgage in Stamford, Conn.”

Have you noticed any major trends in your market?