Now is the time to get off the fence and buy your new home.
Don’t wait. Here’s the bad news: the lowest home prices have come and gone. The opportunity to buy a house below market value is behind us. The best – that is, the Lowest – interest rates were available last year. The buyers market ended in the Fall of 2012.
The good news in today’s real estate market
The good news is that interest rates are still at historic lows, but not the crazy lows that some buyers got last year. The good news is that the financial markets are recovering – your 401K is probably up, buoyed by the DOW reaching within 37 points of its all time record high set in 2007 (as of Close of business, March 4, 2013). The good news is that the Federal Reserve is [still] purchasing eighty five billion in mortgage backed securities a month. Heck, even things like the Fiscal Cliff and the Sequester are coming and going and economy is continuing to claw its way back.
So why am I all fired up, that now is the time to buy that house? Because there are real indications in the news that things will be changing. All in the name of good news for the USA, but not really in the best interests of home buyers. As the stock market reaches ever higher returns, there will be pressure for the Fed to terminate its buyback program. Take away that influx of $85,000,000,000 a month – that’s a lot of zeros – combined with a strong stock market, and the natural market force would be for bond prices to fall and interest rates to climb.
Higher interest rates mean you – the consumer – pay more for the same house because the interest portion is higher. Why do that?
Brian Crowder, Mortgage Officer says, ” rates up maybe .5% at the very most over the lowest in recent history”.
Change in Boulder Real Estate Market
Additionally, there is a change in the market. Already, there is low inventory. Fewer owners have the equity position to sell. More owners elected to rent versus sell and take advantage of the hot rental market. More buyers are appearing to compete with you because – hey, the economy is better. And, during the recession, there was very limited new construction, so there is a lack of housing from apartments to luxury homes for an influx of buyers. It all adds up to a Seller’s Market, complete with multiple offers and accelerating home prices.
IMHO, now is the time to take advantage of still low rates and still low home values. Waiting is a good way to pay more for your new house at a higher monthly mortgage payment. Sure, right now there is some competition, but a solid buyer’s agent can assist you in navigating the home buying process and winning out in a competitive situation. The bottom line? Buyers taking advantage of today’s market will have low payments and see property values gain by year’s end.
Change is already happening the real estate market. Give me a call today. 303-443-3334
Original blog content by Bob Gordon
Additional Resources (updated 5/19/14): comprehensive Mortgage Lender List