Is this the right time to buy?  I have been asked this question so many times, I felt the need to blog about it.  I do believe its a great time to buy and there are a lot of buyers waiting for rates and values to hit bottom.  There are several reasons why now is a good time to buy including:

1.  Interest Rates are low.  Interest rates have recently been as low as 4.75% with no points or origination fees.  While they have risen recently, they are still extremely low based on history.  With rates at 5.5%, you would save $18,600 on a $250,000 purchase, which allows you to spend this additional money on a home or pocket the savings.  Below is a chart that shows the savings at 5.5% and 4.75%.

No one knows how long rates will remain this low.  I already have buyers kicking themselves for missing out on 4.75%.  And, one day, I will have customers kicking themselves for missing 5.5%.

2.  Homes are more affordable now.  Estimates claim home values in the Baltimore metropolitan area have declined 15-25% since 2007.  If this is the case, a $250,000 home was once selling for somewhere around $300,000 or more in 2007.  This is another $50,000 in savings. 

3.  Inventory is high.  With supply so high, the average home is not selling for list price or above list price.  Prior to 2007, many homes were selling for list price or even higher.  This is additional savings.  While these differ per transaction, I would think it would be safe to say this is another 2-5% in savings.  Each seller and each transaction is different. 

4.  We are in a buyer's market.  Most sellers are negotiable and willing to help buyers with closing cost assistance.  While not every seller is willing to pay closing costs, many are.  If a seller contributes $10,000 towards closing costs, this is another $10,000 in savings.

5.  Lastly, there is a tax credit for 5% of the sales price or $7,500 for all first time home buyers.  But, you must settle by June 30, 2009 to qualify for this tax credit.

6.  There are mortgage programs available.  You don't need perfect credit or 20% down.  If you have any financing questions or would like to be prequalified, please give me a call. 

With all these savings, a house that costs $250,000 will cost you $80,000-$100,000 less or more than if you had purchased two years ago.  If you wait for the market to bottom out, you will already have missed the bottom.  No one knows when the bottom has hit until it has already passed.

For all your purchase and refinance needs and questions, feel free to contact me at 410-248-1762 or bob.lowery@prosperitymortgage.com. 

Bob Lowery, Mortgage Consultant

Prosperity Mortgage Company

410.248.1762 Tel

443.653.1720 Mobile

Bob.Lowery@prosperitymortgage.com