Housing – It’s a Buyers’ Market, But is This a Good Time to Buy?
Many possible home buyers are questioning if this is the right time to step back into the housing market. Real estate has been one of the hardest hit sectors of the economy. Pundits are divided as to whether or not this is a good time to buy a home.
It may be years before the economy and the housing market fully recovers. In fact, the housing bottom cannot be called until values have stabilized and are on the way back up across the nation. In the midst of all this uncertainty, could now be the right time to invest in a home?
A quick Internet search will show many different opinions on whether to buy now or wait. It could very well be the right time for YOU to buy, based on lower character pricing and historically low mortgage rates. Educating yourself about the current market situation, and calculating your needs and time frame is basic before you decide to invest in a home.
Many people believe that because character values have fallen so low, homes are now undervalued. While there are certainly some homes on the market now that ARE undervalued; priced lower than what the market can bear, not all homes are underpriced. REO homes (those that are now bank owned due to foreclosure or deeds in lieu of foreclosure) are not necessarily priced below fair market value.
however amidst all the uncertainty about when the housing market will fully retrieve, and whether or not real estate values and prices will fall further, there are facts out there that sustain buying a home now. Mortgage rates are at almost historical low levels, and house prices are back at values not seen since 2003. This could be an excellent time to buy if you believe you will keep the character for several years and can wait for the housing market to stabilize.
It has been forecast that the low mortgage rates are not likely to last beyond the first quarter of 2010. The Feds have been subsidizing the low mortgage rates by purchasing mortgage backed securities, but that subsidy will end March 31, 2010. At that point, most analysts believe rates will rise.
Low mortgage rates allow a possible home buyer to qualify more home at the same monthly payment. There is no way to know now how high or how quickly mortgage rates might rise, but rates are currently about 1% – 1.5% below where they were just a year ago, so that can create a substantial opportunity for a home buyer.
In addition to the low prices and low mortgage rates, the government is encouraging home purchases with the first time home buyers tax credit of up to $8,000, and the existing home buyers’ tax credit of up to $6,500. Buyers must have accepted buy offers no later than April 30, 2010, and must close on that buy by June 30, 2010, in order to qualify for the tax credits. Some states are offering additional cash incentives.
Historically, the United States has experienced many recessions. In fact, expansion and bust cycles are an economic norm. While this recession has been the most harsh since the Great Depression, no one doubts that it will end and housing values will rise again. Historically, character has been a great investment. It is very likely that those who buy now will reap the financial benefits in a few years.