If you’re planning to buy a house right now, the next few months may be the best time to buy. Waiting for both housing prices and interest rates to fall may not be a good strategy for potential homebuyers since analysts don’t expect any significant declines in these two most important home-buying factors. Here’s nine real estate trends that suggest you should get into the housing market sooner than later. (To learn more, check out 5 Sunny Real Estate Markets To Watch In 2011)
TUTORIAL: How to Buy Your First Home
1. Lowest Housing Prices in Years
Nobody knows when the housing market will hit bottom, but prices are at their lowest in several years and may soon start inching back up again. So buying now or in the near future may be the right time. An abundance of bargain-priced housing is now available because of foreclosures and falling prices.
2. Interest Rates at a 50-Year Low
Interest rates are near a 50-year low, according to housing analysts. By the second week of May, 2011, 30-year fixed mortgage rates had fallen to their lowest rates of the year at 4.63%. Although mortgage rates vary from day to day, the 30-year rate at this level is an attractive inducement to first-time buyers, or buyers who want to either move up to larger residences, or others, including many empty-nesters wanting to sell and move to smaller houses or condos.
3. Interest Rates Expected to Go Up
As the economic recovery gains momentum, interest rates are expected to increase, making mortgages more expensive. Even a half-percent increase in mortgage interest can add a hundred dollars or more to your monthly payments, depending on the amount of your loan. (To learn more about interest rates, read Forces Behind Interest Rates.)
4. Adjustable Rate Mortgages at Record Lows
Adjustable Rate Mortgages (ARMs) are also lower now, although there are risks that interest rates may increase over the life of the mortgage and the balloon payment due at the end of the mortgage life, usually three or five years, could be substantial. Nevertheless, for new buyers who are sure they’ll have enough income to meet payment obligations, an ARM may be the best way to buy a house. Keep in mind that payments may increase on a monthly basis. For a full explanation of advantages and risks in an ARM, visit the federalreserve.gov.
Forbes gives 9 Reasons To Buy A House Now
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