“We are all faced with a series of great opportunities
brilliantly disguised as impossible situations.”
– Charles R. Swindoll
A lot of negative coverage has been devoted to today’s housing market. However, there are many reasons why the current real estate market may be beneficial to you.
For example, low sale prices and low interest rates make it a great time to buy.
Buyers tend to pay close attention to sale prices and some choose to remain on the sidelines thinking the prices will continue to fall. This can be a dangerous strategy because price isn't the only factor to take into account. One extremely important factor that gets overlooked are interest rates.
If interest rates rise from 5% to 7% that is equivalent to a 20% increase in price when it comes to your mortgage payment. Interest rates on home loans are historically low, making now a great time to lock in a long-term mortgage rate.
Inflation leads to higher interest rates. As we weather this current economic storm, the government is on a spending spree and is adding huge numbers to the deficit. This kind of spending leads to an increase in inflation which will inevitably lead to an increase in mortgage interest rates.
So for those that are thinking about waiting.....beware of inflation. It can have a dramatic effect on your ability to purchase a home. Remember higher interest rates are equivalent to higher home prices and since we are seeing stable prices and rising prices in many areas, you don't want to end up with higher home prices and higher interest rates.
Ultimately, though, the current favorable conditions will go away. As inflation rises, so will interest
rates. If you are looking to become a homeowner, you need to strike while the iron is hot!
