Housing: It’s a Buyers Market, But Is This a Good Time to Buy?
Many potential home buyers are wondering if this is the right time to get back into the real estate market. The real estate sector has been one of the most affected sectors of the economy. Experts are divided on whether or not this is a good time to buy a home.
It may be years before the economy and housing market fully recover. In fact, you can’t hit the bottom of housing until values have stabilized and are on track to rise again across the country. Amidst all this uncertainty, could now be the right time to invest in a home?
A quick internet search will reveal many different opinions on whether to buy now or wait. It may very well be the right time for YOU to buy, based on lower property prices and historically low mortgage rates. Finding out about the current market situation and determining your needs and deadlines is essential before deciding to invest in a home.
Many people believe that because property values have dropped so low, houses are now undervalued. While there are certainly some homes on the market right now that ARE undervalued; Priced lower than the market can bear, not all houses are priced lower. REO homes (those now owned by the bank due to foreclosure or deeds in lieu of foreclosure) are not necessarily priced below fair market value.
However, amidst all the uncertainty about when the housing market will fully recover, and whether or not home values and prices will fall further, there are facts that support buying a home now. Mortgage rates are at near-record levels and home prices are back at values not seen since 2003. This could be a great time to buy if you think you’ll be holding the property for several years and can wait for the housing market to settle. the house recovers. stabilize.
It has been forecast that low mortgage rates probably won’t last beyond the first quarter of 2010. The feds have been subsidizing low mortgage rates by buying mortgage-backed securities, but that subsidy will end on March 31, 2010. At that For now, most analysts believe rates will rise.
Low mortgage rates allow a potential homebuyer to qualify for more homes with the same monthly payment. There’s no way of knowing now how high or how fast mortgage rates might rise, but rates are currently 1% to 1.5% lower than they were just a year ago, so you can create an important opportunity for a home buyer.
In addition to low prices and low mortgage rates, the government is encouraging home purchases with up to an $8,000 tax credit for first-time homebuyers and up to a $6,500 tax credit for existing homebuyers. Buyers must have accepted purchase offers no later than April 30, 2010 and must close on that purchase by June 30, 2010 to qualify for tax credits. Some states are offering additional cash incentives.
Historically, the United States has experienced many recessions. In fact, boom and bust cycles are an economic norm. While this recession has been the most severe since the Great Depression, no one doubts that it will end and home values will rise again. Historically, property has been a great investment. Those who buy now will most likely reap the financial benefits in a few years.