Your opportunity to get less house for more money is here

Lifestyle upgrades are easiest to enjoy if they include a better place to come home to. That's probably why most of us tend to consider changing homes every once in a while.  With the housing depression came opportunities for first time buyers and well-positioned move up buyers.  Some took advantage of those opportunities, and some were scared by the acute drop in home values with no end in plain sight.  Well, that was then and this is now. 

Home prices are rising from their bottom of a couple years ago, and the best opportunities have either been seized or missed.  Prices are still attractive, probably as attractive as they are going to get.  There are not as many homes on the market as there were last year or the several years before, and that makes for not only higher prices, but also for more potential buyers choosing from fewer homes.  So, if you have been trying to decide whether you should buy for a while, you missed the big sale.  Now you will have to pay 2013 prices and maybe settle for something that isn't as nice as your missed 2011 choice.  That's a little difficult to swallow, but it's not the worst of it.

More important is the fact that, unless your income is increasing substantially, your buying power is deteriorating.  Interest rates are climbing, and that means less borrowing power for everyone.  For example, let's say that your budget allows for $1,000 a month for principal and interest on the loan for the home you want to own.  At 3% interest, that thousand dollars a month would cover about $237,000.  4% would drop the borrowing power to $209,00 for the same thousand dollars, 5% drops to $186,000. 

Although nobody can precisely predict the future, interest rates are expected to continue rising, and 5% by the end of next year is a reasonable expectation.  Your opportunity to get less house for more money is here, but it will probably never be as good as it is today.  Call me if you want to discuss the current market trends and how they are likely to affect your long or short term plans for that lifestyle upgrade you deserve.