Special offer

When Is The Right Time To Purchase A House???

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

 It will not be long before we get more Economic Reports for 2007, and especially on what the interest rates and housing costs will be for the upcoming year.  I say prediction because that is what they are, and like most predictions they can be wrong.  They are only someone’s guess based on the economic data they have available right now.  This data changes constantly, and depending on what happens, these economic indicators can change with a blink of an eye.  Are these predictions good educated guesses? Yes they are, but lets just take a quick look at what was predicted were for 2006.

As early as June of 2005 I was getting reports stating that the mortgages rates on a 30 year fixed mortgage would be 7% by January of 2006.  This did not happen, in fact my 30 year fixed rate in January of 2006 was 6.125% with no points.  The rate did finally hit 7% around June/July of 2006, but then start to come back down again, and today my rate on a 30 year fixed mortgage is 6.25%.  This is almost the same rate a year later, and they have been holding at this level for about a month now.  The predictions for 2007 will probably be much the same as they were for 2006.  The safe bet would be to say that rates are going to go up, but who knows, they could continue to go down as they have been the last several months.  If the financial gurus’ predictions could be taken as fact, there income would have several more zeros after it.

So what does this all mean?  What it means is that no matter how complete the economic model is for making these predictions, they will always be just that predictions, and predictions can be wrong a good percentage of the time.  All it takes is for a couple of unexpected things to occur in the financial world and predictions start to change.  What we need to do is to treat these predictions for exactly what they are, guesses and not fact.  Unfortunately all too often consumers do look at them as fact, and hold off doing what they really want to do.

This is why when I am talking to a Borrower, and they ask me should they buy know or wait, my answer is always buy now.  The best time to buy is always now, because as you can see we really don’t know what the economic conditions are going to be tomorrow.  All of the economic data in the world can do is to predict a trend, which could change in a blink of an eye with new data that is being generated every second.  So why wait and take a chance on interest rates being higher, and houses costing more.  If you can afford it today, then it is today that you should purchase.  If you find a house that you want to purchase, at a price that you can afford, then don’t wait, purchase it now.  Unless you are buying a house as a short term investment, then it does not matter if the house prices drop, because one thing that we do know with a high degree of certainty is that over the long term the value will go up.  In the long term Real Estate is one of the best investments that you can make. 

So if I have a Borrower who is ready to buy today, then it is today that I am going to advise them to buy. Today is the only day that we truly know what the rate and house prices are, tomorrow it could be much different.  So homebuyers whether it is your first home, or your third home, base your decisions on facts, not guesses that could be completely wrong tomorrow.  Base your decision on what the facts are today.

 

********************************************************************************************

Info about the author:

George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

Posted by

George Souto
NMLS# 65149

C (860) 573-1308
CALL 7 Days/Wk
Fax (860) 760-6891

Email Me
About Me
My Blog

I am a Mortgage Loan Officer who can assist you with all your mortgage & refinancing needs in
CT, and RI

I can assist you with your Conventional,
FHA, CHFA, VA, USDA, & 203K loan programs.

I reside in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Haddam. E. Haddam, Higganum, Chester, Essex, Deep River.

 

Comments (28)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Carole, don't get the keyboard wet....LOL

I don't know how many zeros at the end of his salary, but I think I would exchange paychecks with him....LOL

Jeff, times have sure changed from back then.  People that I talk to seem very nervous about what they keep on hearing from the news media.  My feeling is that people in the Real Estate business need to be positive about the future, because most other people are trying to paint a negative picture. 

Dec 26, 2006 10:05 AM
Linda Davis
RE/MAX Home Team - Gales Ferry, CT

Blame it on the "Drive-by Media" 

Who are the "Drive by Media"? - "They are exactly like drive-by shooters, they pull up to a congested area, they spray a hail of bullets into the crowd. It causes mass hysteria, confusion, mistakes, and misinterpretation.... and then the drive-by media smirks and they ride away, unnoticed in the excitement. They're never blamed, they're never held accountable. "  - RL

Dec 26, 2006 10:31 AM
Home Design
Alpharetta, GA
Home Design and Real Estate
Come on George!  Its always a great time to buy a home!  LOL.....I wish the media would go away for a year!  Great Post as usual.
Dec 26, 2006 10:53 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Linda, you have me laughing with that comment, but you are right "they'er never held accountable"

Jennifer, I would settle for them just taking it easy for a couple of months....LOL 

Dec 26, 2006 11:36 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Hi George,

Assuming your life is going to be stable for the next two years. Any time today is better than any time tomorrow!

Procrastinators always pay more, or never buy and wonder why everyone else is more successful!

Happy New Year!

Bill

William J Archambault Jr

The Real Estate Investment Institute

http://www.reii.org

Dec 26, 2006 12:58 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert
William, thank you for your input, I like the way you phrased this "Procrastinators always pay more, or never buy and wonder why everyone else is more successful!" Very well put.
Dec 26, 2006 01:07 PM
Colleen Irwin
Retired - Irondequoit, NY
Creative Real Estate Solutions...
George -- thank you for such a well written post!   Congratulations on a job well done!
Dec 26, 2006 02:58 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert
Colleen, thank you.  I was just about to call it quits for the night.  I am glad I caught your comment before I did.
Dec 26, 2006 03:02 PM
Randy L. Prothero
eXp Realty - Hollister, MO
Missouri REALTOR, (808) 384-5645
I like your answer.  They have to have a place to live.
Dec 26, 2006 04:33 PM
Eli Magen
New World Mortgages,(Mortgage Company) - Orlando, FL

George, Why did you post this one...? I was sure everybody are buying TODAY with no questions asked...LOL.

Well, thats a good post, and naturally one that finds what he wants, location and price, should close on it, not "wait" for the Massaiah...

Predictions - I don't really read about those anymore...they are changing quite often...as often as a reporter needs to post another article about real estate and rates...

Dec 27, 2006 04:06 AM
Rich Jacobson
Fathom Realty West Sound - Poulsbo, WA
Your Kitsap County WA Real Estate Broker
George, good stuff! I always think back to my first home purchase at 9.75%. And I thought that was a deal then!
Dec 27, 2006 06:10 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Randy, they might as well pick out that place now rather then later.

Eli, I agree they should all buy today, especially if I am doing the loan....LOL  I love the "not wait for the Massaiah" comment.  I have to remember that one.

Rich, the house I live in now I bought in 1981 and the interest rates then were 15%, 9.75 would have looked great to me too.....LOL. 

Dec 27, 2006 06:26 AM
Sue Paige
ERA Today Realty, Windham, ME 04062 - Windham, ME

This is great to read and I love the clock. Good job George.

Hope you had a good holiday. and to think it isn't over yet.

So how does it look for the new year with lending monies? I hear the stocks sounding good for the stock market. Does that effect us? I know it does, just wondering what it means for us who are trying to help those thinking of selling and buying.

sue from maine

Dec 28, 2006 02:48 AM
John Klassen
M & T Bank - Kingston, NY
When you are ready...its time.
Dec 28, 2006 03:04 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Sue, I have the clock below my name on my e-mails.

I just hope the rates keep on holding where they are, and I don't see any reason why they can't.  I think 2007 will be a great year. 

John, I like your attitude. 

Dec 28, 2006 03:59 AM
Monika McGillicuddy
Prudential Verani Realty - Atkinson, NH
NH Real Estate Broker

George...Somehow I missed this!!  Can I borrow this blog??? With your name and contact info on it of course...

I think it's a great consumer piece and well written. 

Monika 

Dec 30, 2006 11:53 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert
Monika, yes of course you can, I would be honored if you did. Thank you for the compliment.
Dec 30, 2006 12:35 PM
Monika McGillicuddy
Prudential Verani Realty - Atkinson, NH
NH Real Estate Broker

George did you get the link I sent??

Moni 

Jan 04, 2007 11:18 AM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Phil, I am looking forward to 2007, I think it will be a real good year. 

Monika, I got the e-mail but the link dit not work, it was telling me that it could not find it.  Thanks for reminding me because I meant to e-mail you back.  Can you re-send it so I can see if it works now?

Jan 04, 2007 01:24 PM
Monika McGillicuddy
Prudential Verani Realty - Atkinson, NH
NH Real Estate Broker

George it was featured on the front page for 3 days...not sure if it still is.  I'll resend the link.

Thanks so much. 

Jan 04, 2007 01:47 PM