Each week I receive 10-20 phone calls and emails from interested buyers wondering if it is good time to buy a home. My first reaction is, “are you kidding me?” I honestly believe this is one of the best times to buy in the last 10 years and it probably won’t get any better than right now. The other statement I hear from buyers is, “I only want to buy if it’s a great deal.” Of course buyers want a great deal. I’ve never met a buyer who wanted a lousy deal or to buy a home that was overpriced. The fact of the matter is that most homes for sale right now are a good deal.
Prices have dropped anywhere from 25%-60% (depending on location and price) from their high a few years ago. More buyers can afford to buy homes now more than over the last several years. Now is the time! Interest’s rates are below 5% and most homes are on “sale.” The days of “Interest Only” and “Stated Income Loans” for anyone that had a pulse are gone for the foreseeable future. Buyers actually have to qualify for a loan now. That means full income documentation.
Buyers will say, “ I will wait to see what happens with the market.” Are they waiting for the prices to go up or the interest’s rates to go up? Both are not very good for buyers. And keep in mind; even if the price of a $300,000 home goes down another $10,000 or $20,000, this is not as significant as the interest rate. If the interest rate goes up a point or a point and a half, it may price them right of the house. Let me show you.
If your principle is $300,000 and your interest rate is 5%, your payment will be $1611.
If interest rate goes up to 6.5% and your principle is $300,000 your payment will be $1897.
Let’s say your principle is only $280,000, with the interest rate of 6.5%, your payment will be $1770, which is more than the first scenario.
Interest rates are more important at this point in time than the price of the home. If you can afford to buy, than BUY NOW—DON’T WAIT. This may be your only chance.
