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There are indicators showing that the nations housing market is about to have some troubling times through most of 2010. On the other side, this could be the best time to purchase a home due to mortgage rates and tax credits offered by the federal government.
Some of the reasons that we are going to see troubling times ahead include:
Currently, more than 14% of the homeowners in the United States are delinquent on their mortgage payments. According to a study done by Amherst Securities Group during the month of September, nearly 7 million residential properties are in immanent danger of being foreclosed upon. These numbers are especially troubling when you keep in mind that unemployment rates continue to rise nationwide; if they don’t rise, there’s not much hope for a significant decrease.
In addition, the construction of new homes fell 10.6% during the month of October. That changed the annual seasonally adjusted rate to 529,000 units from 592,000 the month before. The recovery of the housing market is being slowed and the reduction of new homes being built is a huge indicator that things aren’t getting better.
Despite all the troubling figures indicating a slow recovery, this could be one of the best times to purchase a home. Here’s why:
At the end of November and the beginning of December, interest rates tied the record for a low, and they’re staying down.
Median home prices are slowly rising throughout the United States indicating that people are willing to pay more for a home, but homes are still more affordable than they’ve been in years.
The tax credit for first time home buyers was extended and even expanded to current homeowners after December 1, 2009. The credit was extended until spring of 2010.
Because of these factors – low interest rates, a steady demand for housing, the federal tax credit and affordable home prices, you might want to consider buying a home. If you don’t need a new home and can’t afford one, don’t buy one, but if you’re in the market and you’ve been waiting for a good time, it might be that time.
At the end of the day, it’s a mixed bag of good and bad news. Real estate remains local while buying in one area might be a great idea, it might be a terrible idea to buy in another. Ask a real estate professional if you’re thinking about buying a home – the advice is usually free for the buyer and it’s certainly worth it.
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