Interest rates are trending slightly up from last week but still remain at amazingly low levels.
With May and June’s home sales reports showing that we are still in a lull, who are buying homes? Maybe a better question is: When is the right time to buy a home when values could still drop? I was talking with a first time home buying couple last week and think I stumbled onto a fairly good analogy. First, I have always seen a home as a long term investment. Even in the rapid rise of home values several years ago, buying a home with the intention of selling within a year or two was a very risky proposition (obviously with hindsight, it was much more risky than we imagined it ever would be at the time).
So, the goal is to buy low and sell high, right? Much like the stock market, I would say this is a pretty universal goal. How do we make sure we buy at the lowest possible price and then sell at the highest possible price? It’s impossible to be sure so the best a savvy home buyer can do is purchase when homes are in a lower dip than they have been and then look to sell when home prices are rebounding higher than they have been. If you could time this perfectly, you would profit in an unbelievable manner but by keeping these general principals in hand and not panicking, you can still make a modest and consistent profit without timing things perfectly.
Personally, I feel this is the silliest time to be afraid of buying. Whether or not we have hit the bottom remains to be seen but we are definitely in a lower period of home values and when looking at purchasing over the long term, in 10-15 years, this investment could be a significant help towards your retirement plan or simply a boost to the next step in life. My home value as dropped from when I purchased it 6 years ago like many homeowners and like any other part of my retirement plan, I know that it will come back up eventually and put us in a great position once our children our ready to set out on their own.
Rates are below, have a great week!
Rates: 30 year fixed at 4.50% and the 15 year at 3.75%, FHA: 4.25%: As always rates change with individual credit scenarios and programs, with credit in the mid 700s and a 20% down payment these rates are what you should be seeing.
Matt Royer Mortgage Consultant, CMC | Homes Mortgage NMLS# 366970