If You Don’t Buy a House Now, You’re Stupid or Broke
Have you read this article yet? It was featured in Business Week. To the point! The writer, Mark Roth, uses this title to get your attention to make excellent points for those who are on the fence. Namely, that interest rates are at an all time low, in fact, the lowest in 40 years. He noted that in the late 70s, rates hit a high of 18%! Can you even imagine buying a house at 18%? Generation X’ers probably would never dream of purchasing a home above 7% given all they have ever known are super low rates hovering between 5-6%. Mr. Roth points out the history of previous interest rates as well as the impact of rates on one’s purchasing power. I happen to agree with his prediction that as the economy becomes more stable, interest rates WILL rise to hedge inflation. Predictions suggest that by this time next year, rates will have risen 1-2% at a minimum. For a typical Pulaski county home priced at $200,000, current mortgage would be around $1073. Next year? $1330. That is a 25% increase in your monthly principal payment! That is IF the price remains the same. Odds are prices of homes will continue to increase as well. Today’s $200,000 may cost you $205,000-$210,000 this time next year.
Get the picture! Reports suggest that 50% of the real estate transactions this year were first time home buyers taking advantage of the $8000 tax credit. The government is giving you FREE money in order to motivate you to make an investment in homeownership which has proven over time it is the best long term investment around. Now, current homeowners can also get FREE money…up to $6500 for buying their next home! Can I get an AMEN from the congregation?
Some buyers may be on the fence because they fear prices may drop further. All the economic statistics say we have reached bottom and can go nowhere but up from here. Pulaski County prices have remained fairly constant with moderate increases this year (2-3%). Next Years forecast – You spend more money per month plus at the higher interest rate, you pay more interest over the life of the loan, and you pay a higher price for the home. Real estate appreciation is always a cycle and as the economy stabilizes, values will level out.
Mark Roth summed up the article, "What I’m trying to impress upon everyone is that if you are planning on being a homeowner now and/or in the foreseeable future, or if you are looking to move your family into a bigger home, then pay more attention to the interest rates than the price of the home. If you have a steady job, good credit, and the down payment, then you really are being offered the gift of a lifetime."
EXIT Realty Deaton Group is here to help with this huge, yet extremely important, decision. If you are currently renting or considering purchasing a home and would like a FREE consultation, lets sit down and weigh your options. It’s the perfect storm – low interest rates, lower home prices, high inventory to choose from, and OH YEAH…the government is giving you up to $8000! Do I hear another AMEN!
"I Am Building a Company, By Design, that Honors Success & Productivity."
For a short video on what is EXIT, go to www.ExitRealty.com and click "Up Close and Personal with EXIT"
\nBy: on December 11th, 2009 Category: Uncategorized