Loudoun and Fairfax Investors. Don’t Miss Your Chance!
It is one thing for me as a Realtor to motivate you about the times that we are in when it comes to buying. It is another thing for an outside source with no vested interest to say the same thing. Time magazine published a great article called “Ignore The Headlines,” on the current real estate and financial market. Here is a clip…
Let’s say you are emotionally ready to be a homeowner. You have good credit, plan to stay put for five years and have been waiting for the perfect entry point. It’s time to get serious–before an inevitable rise in interest rates wipes out your advantage. “The thing that will make home prices stop falling is the very same thing that will push mortgage rates higher,” says Jim Svinth, chief economist at mortgage firm Lending Tree. So anything you gain by a further drop in prices might be offset by rising financing costs.Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today’s rate of 5.5%. Monthly principal and interest come to $994.31. Let’s say that 12 months from now the same house goes for 10% less, or $197,010. But by then the recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you’d have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you’d rather not be.
It’s more complicated if you must sell before you can buy. But that logjam won’t persist forever–and if it appears you’ll be trapped for a few years, try to refinance at today’s lower rates. Risks always seem most acute when the headlines give you ulcers. But that’s exactly when you should think long term–and get off your thumbs.
Nice point! I am West Toronto realtor team member and some of my colleagues from other canadian real companies are really scared of US market development. But I keep saying, that chance to make a great deal exists anywhere and anytime, you just have to know what to do and see “behind the curtain” – like the correlation of mortgage rates and market situation twist…
A valid point indeed.
Qualified buyers that are planning on staying long-term has a handful of good reasons to buy now.
Thanks for sharing the story.