Fixed-rate mortgages of Four percent, zero-down payment requirements, and a 30-40 percent break on the market value of the house appear to be what many “on the fence” home buyers are waiting for before they consider purchasing a home.
WE ARE THERE!
KEEP THIS IN MIND
• According to a study of more than 700 self-described “on-the-fence” buyers, 44 percent responded that they haven’t yet committed to purchasing a home because they are waiting for lower mortgage rates. (WE ARE HERE NOW)
The study, conducted by the National Association of Home Builders’ research subsidiary, found that 41 percent of undecided buyers are unsure if they could qualify for financing. Another 38 percent reported they expect to see home prices decline further.
Again people we are there now- my opinion – people are gambling if they wait longer. The interest rates are good now- even if and when homes will go down- I believe the rates will go up again.
• The study found that concerns about declining property values were most prevalent among home buyers in the Western region, while buyers in the Northeastern and Midwestern states were more concerned with lower mortgage interest rates.
• Of the potential home buyers surveyed, the mortgage rate that seemed most favorable and would be most effective in persuading consumers to buy now is a 30-year, fixed-rate mortgage at 3 percent. Now we are closer to the mid 4’s. According to Freddie Mac, interest rates on 30-year, fixed-rate mortgages averaged 5.25 percent for the week ending Feb. 5.
• Survey respondents said guarantees by home builders that their loan applications would be accepted with verifiable proof of income and a “fair” credit score ranked six times more effective than standard application procedures.
• Price concessions, such as a 10-percent discount below market value, appeared to be the most compelling option for on-the-fence buyers.
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To put this into perspective- if you plan to stay in your home for awhile– waiting can price you out of the market. Home prices are already good. Get in now while interest rates are still low. They are the lowest they have been in over 30 years. While people gamble and wait for prices to drop, they may lose the ability to qualify for a loan if rates climb. Buyers have to live somewhere and paying rent can be the same price as paying on a mortgage. Have a CPA run Numbers for you on tax savings with owning a home. At least once you buy, you are gaining equity for the future when prices come back up.
Kathy Dyer Realtor CABRE #01723710
KW Coastal Estates
Carmel Ca. 93923