From a total cost of ownership perspective, I don't think real estate is going to get any cheaper than it is today. Sure, we scurried like rabbits when our real estate world came crumbling down in 2006, and have waded in the rubble of ruined mortgages we're all too familiar with today. But if timing was on your side and you've been with mom and dad, renting, returning from a tour of duty - or have equity and need to expand on space to keep your kids out of your hair - now is the time to act!
An excerpt taken from the Redfin, May 2010 Newsletter:
But the big news is the drop in mortgage rates, a drop so large and unanticipated that the Wall Street Journal splashed it across the front page on Monday:
Many in the industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of rising to 6% as some economists projected, making for significantly lower payments for Americans buying homes or refinancing their mortgages.
As of May 20, the average rate for a 30-year mortgage was 4.84%. We've also seen rates on jumbo loans ease, which is important for the credit-starved high-end of the market. So why are rates going down after years of high government debt? The European bond market is so screwed up right now because of Greece that smart money is seeking a safe haven in U.S. mortgages. In the land of the blind, the one-eyed man is king. And as we've argued before, interest rates affect real estate prices more than most people realize.
We're still worried that rates long-term will rise, that foreclosures will remain a major force in the market, that that there will be a big hangover in June or July numbers once the tax credit is truly over and done with. But after June's tax-credit hangover, we can't help but believe that rates this low will give summer home-buyers a real jolt.