My Blog

For the following reasons I believe that now is the best time to buy a home:

• The federal government plans to invest as much as ONE TRILLION dollars into mortgage backed securities, therefore it is highly likely that mortgage rates will continue to drop. Most sellers are more flexible now than they will be when a significant number of potential buyers become motivated by lower mortage rates.
• Consumer confidence levels are at all time lows, and this translates to home sellers as well.  Everyone is worn out by the negativity! Home sellers have unfortunately been extremely frustrated by market conditions and those who still have their homes listed are typically very motivated because they need to sell for one reason or another.  There are many more "deals" available right now than there will be once buyers begin to take advantage of low rates.
• Home prices have dropped by tremendous amounts over the last 2+ years.  Sure, it is possible that prices may fall further in some areas, however as mortgage rates fall housing prices will stabilize.  Once stabilization (better known as "the bottom") occurs, prices will slowly begin to rise again.
• As more buyers come back into the market due to low interest rates and low prices, demand will increase which will cause sellers to become less flexible.
• The federal government does not want to see further erosion in nationwide housing prices, which is why they plan to back mortgages and keep mortgage rates low.  The deterioration of wealth in the U.S. housing market has been massive.  The feds would much prefer to see lower rates and price stabilization than they would further deterioration in the housing market because they know the housing market must recover before the overall economy will recover.  There are two ways to stabilize the housing market. The first is to have prices come down further and the second is to have interest rates come down dramatically.  The federal government has chosen the latter because it is much less painful.
• According to Steve Habetz from Threshold Mortage (Steve was recently interviewed on Fox Business Network), we will likely see 30 year fixed mortgage rates drop to below 5% within the next 10 months or so.  He says "Buy at the lowest price today and you can refi at the lowest rate tomorrow."

The truth is that nobody will know when we've hit the actual bottom of the housing market until it's behind us.  At that time the absolute best deals will no longer be available.  It's almost impossible to purchase at just the right time when you will get the lowest rate and the lowest price simultaneously.  But there's no doubt that housing is a bargain in most areas at the current level and there's more inventory to choose from and more motivation on the part of sellers than there will be as mortgage rates continue to drop.

So there you have it...my opinion.  What do you think?