January 31, 2011
A few days ago I wrote a post about this being a good time to buy a home citing three conditions that I believed make this a desirable time to buy: Employment Outlook, Consumer Confidence and Interest rates.
Well I was right, at least according to the NAR Baseline Outlook prepared by Lawrence Yun, Senior VP and Chief Economist at NAR published on 11-05-11. Yun cited the following items that are "compelling".
Stability in Home Values, according to Macromedia home values are expected to rise modestly with only a 4% gain in 2014.
The mortgage rates have bottomed out, rates are expected to hit 5% in 2011 and 5.9% in 2012. The difference between a rate of 4.81% and 5.9% is almost $75 per month per $100,000 borrowed. For you math whizzes out there, that's over $2,200 a year extra in payments on a $250,000 home.
Existing homes are finally considerably cheaper than new construction.
Home Sales will improve "in line with job growth; 5.2 million in 2011 (up from 4.8 million in 2010, but same as 2000)"
"Pent up Demand" The population has increased by 30,000,000 since 2000 but the number of home sales has remained the same.
Profits earned by businesses has returned to the 2006 level but the spending has not resumed yet. As soon as business spending picks up the economy will improve dramatically.
So there you have it, advice from a Realtor® and an economist. It really is a good time to buy.