For the past few months, we have been hearing about the improvement in the housing market. In fact, the financial institutions and experts have repeatedly highlighted this statement. How does it affect the potential buyers? Does it indicate a good time for purchasing new house?
Let us have a look at the current housing industry. As mentioned in the S&P/Case-Shiller Indices for Home Price, there has been a rise of 10.2 percent in the value of houses at the national level. However, they are still not matching against the prices before the pre-financial crisis.
On the other hand, the rate of mortgages has reached an all-time historic low level when compared against 17% during 1980s or 8% during 1990s on a 30-year fixed mortgage. But the past few months have observed a rise in the mortgage rate with the 30-year fixed mortgage rising to 4.12% as mentioned by the survey of Bankrate.com. These rates have seen an increase in the past six weeks from 3.52%.
After all this discussion, do you consider it the right time to purchase a new home?
According to IIyce R. Glink, award winning real estate columnist, it is the right time to buy a new house.
It is true about the rise in the prices of homes but there are some communities where the price of the houses is 30 to 50 percent below their peak value. It implies that you can still crack an excellent deal with efficient research practices.
On top of all of these factors, one should not purchase a property just because they can afford it rather, they should consider the investment point of view. As mentioned by Glink, an investor should ask himself about his/her goals for the next five years to come.
It may seem like a long time but in reality, this is the time that you need to wait for to get the cost of selling a home evened out with the gain in its price. It is important to do your math properly and get some expert advice so that you may not lose your money if you could not profit from the same. This is among the most important factors that you need to consider while purchasing a new home. Further, we all must learn from the real estate crisis that the price of the property will not always keep rising.
The bottom line about mortgage rates is that, if 0.5 percent change in mortgage rates means affordability to you, you are choosing the wrong property. Stick in a price range you can truly afford.
For the buyers interested in discounted property, it is best to target distressed properties including short sales and foreclosures in your locality!
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