I was going to write a blog explaining why it is a great time to buy, in general. But, given the times we are in, it is a little bit difficult to make blanket statements like that. I think we all might have a new appreciation for the complexities of real estate, and the good old value of the dollar. I don’t think many people are in the business of spending money on a whim right now, especially when we’re talking about a purchase like a home.
That said, we just purchased a home and I am proud to say we got an awesome deal. Record low interest rates, foreclosures driving prices down, and an oversaturated market means there is a lot to choose from for home buyers. I really do feel bittersweet when I say that the bitter economic times created a sweet spot.
1) Interest rates are at a record low.
According to Freddie Mac, 30 year fixed rate mortgage interest rates are averaging at about 4.6% . This is the lowest interest rates have been since the 1950s.
Just to give you an idea of how much that saves over the lifetime of the loan, let’s go through an example. If you have a loan amount of $160,000 you would pay a total of about $204,071 over the course of the loan at an interest rate of 6.5%. At 4.75%, the total interest amount is roughly $140,468. That’s about $60,000.
2) The number of homes on the market are up.
Many people are trying to sell their homes right now. The upside to this is that there are many homes to choose from so that you can find the one that is just right for you.
3) The price of homes are down.
It is no news that these are tough economic times, with many home owners facing foreclosure and exploring options like short sales. These types of sales can force home prices down to remain competitive. The bottom line is, real estate values are dropping. This means that it is a great time to buy because you may be able to get a home at a really good price.
So, if you are in the position to be thinking about purchasing a home, these factors are going in your direction. Am I saying that because interest rates are down we through caution to the wind and went shopping? Of course not. We were actually very conservative about our approach, and our buyer’s agent encouraged and respected our concerns and caution.
If you would like to discuss your position with a member of our association, fill in our buyer agent inquiry form.