Lower home prices fueled a home buying frenzy for the last 9 months. Recently, he have seen a shift in the market causing some to think that we may see another “housing bust.”?
However, will waiting for rock bottom prices end up hurting you?
The last few years interest rates were at all time lows making home ownership a little easier for some to achieve. In 2013 we began seeing interest rates rise and are now hearing that they are not expected to go back down. In fact, they will continue to rise.
An FHA loan is the most popular loan for first time home buyers. Although FHA allows you to get into home with as low as 3.5% down, over the past year the Federal Housing Administration has raised the monthly mortgage insurance premium and extended the length in which it is required to carry this insurance resulting in increasing monthly mortgage payments.
Conventional interest rates have risen over the past year from on average of 3.6% to 4.6%. (Diagram above depicts monthly payment increase)
So what are you waiting for? Another decline in the market? The “shadow inventory” banks are supposed to release? The problem with these strategies are that they are uncertain. We don’t know if a bust will occur or if banks even have “shadow inventory.”
The one thing we do know is that rates are on the rise! “Every tenth of a point that rates go up makes buying more expensive,” says Jed Kolko, Trulia’s chief economist. “It will almost certainly be more expensive to buy six months, a year or even two years from now.”
Now that the holidays are behind us and the New Year is here, don’t delay any longer! There is no better time than now to buy a new home.
When you make the decision to purchase a home, call a PRO.
Barry Home Pro
Direct: (480) 253-9286