We have all heard the main stream media reporting on the dismal real estate market as though it were on a non-stop audio loop. Despite these continuous reports, four major media outlets have come out this month with the same advice: if you are ever going to buy a home, now is the time!
Here are the four articles each from respected news sources along with a summary of why their advice makes sense.
The Wall Street Journal: Why It’s Time To Buy
Forbes Magazine: 9 Reasons To Buy A House Now
National Public Radio: For Many, It’s Still A Good Time To Buy A Home
Considering that most news reports are saying home prices continue to depreciate in most regions of the country, you may be wondering why these four media outlets are suggesting that now is the time to buy. Well, one of the things that each of these entities recognize is that the price of a property is not as important as the cost. Even as prices fall, the cost of a house can actually increase. Unless you are paying cash for the particular property, you must consider the expense of financing when calculating the full cost.
Interest rates for home mortgages are currently at historic lows. That being said, Fannie Mae, Freddie Mac, PMI and the National Association of Realtors are all projecting a 1% increase in those rates over the next year. It is important to keep in mind that a 1% increase in mortgage rates negates a 10% decrease in prices!
While we are speaking about mortgages, we also need to know that the government as proposed a tightening of the lending standards referred to as Quality Residential Morgtage (QRM). If these changes are accepted as proposed, it will mean two things to the average home buyer:
- Qualifying for a loan will become much more difficult
- The cost of a loan will increase
The government has proposed a tightening of lending standards called Quality Residential Mortgage (QRM). If accepted as proposed two things will happen:
So the bottom line for people currently on the fence about jumping in and purchasing a home is that now is definitely the time to buy. The cost of purchasing a home is about to increase even if prices continue to fall.
For more information on the market conditions in Highlands or Cashiers NC, contact any of the professional brokers at Meadows Mountain Realty at [email protected] or by calling 828.526.1717.