There are some who are calling for a decrease in home prices should mortgage interest rates begin to rise rapidly. Intuitively, this makes sense as the cost of a home is determined by the price of the home, plus the cost of financing that home. If mortgage interest rates increase, fewer people will be able to buy, and logic says prices will fall if demand decreases.
However, history shows us that this has not been the case the last four times mortgage interest rates dramatically increased.
Here is a graph showing what actually happened:
A recent study of more than 7 million home sales over the past four years revealed that the season in which a home is listed may be able to shed some light on the likelihood that the home will sell for more than asking price, as well as how quickly the sale will close.
It’s no surprise that listing a home for sale during the spring saw the largest return, as the spring is traditionally the busiest month for real estate. What is surprising, though, is that listing during the winter came in second!
People often ask if now is a good time to buy a home. No one ever asks when a good time to rent is. However, we want to make certain that everyone understands that today is NOT a good time to rent.
The Census Bureau recently released their third quarter median rent numbers. Here is a graph showing rent increases from 1988 until today:
As the temperature in many areas of the country starts to cool down, you might think that the housing market will do the same. This couldn’t be further from the truth! Here are 4 reasons you should consider buying your dream home this winter instead of waiting for spring!
1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.3% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
According to a recent report by Trulia, “buying is cheaper than renting in 100 of the largest metro areas by an average of 37.7%.” That may have some thinking about buying a home instead of signing another lease extension. But, does that make sense from a financial perspective?
In the report, Ralph McLaughlin, Trulia‘s Chief Economist explains:
在報告中，Trulia首席經濟學家Ralph McLaughlin解釋說： (more…)
There is no doubt that mortgage credit availability is expanding, meaning it is easier to finance a home today than it was last year. However, the mortgage market is still much tighter than it was prior to the housing boom and bust experienced between 2003 – 2006.
毫無疑問，房屋貸款的可得性正在擴大，這意味著現在比去年更容易拿到貸款，然而，房貸市場仍然比2003 – 2006年房市繁榮和蕭條期間更為嚴格。
The Housing Financing Policy Center at the Urban Institute just released data revealing two reasons for the current exceptionally high credit standards:
I met with college friends for lunch.
Our friend Linda picked the spot and Jang Ga Nae.
She said she watched a Korean drama “Let’s Eat”,
and the main characters had Gam Ja Tang so she wanted it, too.
Her Korean husband found this restaurant, and it was one of the best Gam Ja Tang she’s had.
這天和大學同學吃午餐，Linda同學選了Jang Ga Nae這家餐廳，
When I was kid in Taiwan, my parents used to take us to those shabu and BBQ kind of restaurant.
They all have similar names… Kariya, Coriya, Cariya, Karaya and that sort.
Mortgage interest rates, as reported by Freddie Mac, have increased over the last several weeks. Along with Freddie Mac, Fannie Mae, the Mortgage Bankers Association and the National Association of Realtors are all calling for mortgage rates to continue to rise over the next four quarters.
Freddie Mac的報導指出房貸利率在過去幾周持續增漲，Freddie Mac、Fannie Mae、房貸銀行家協會和全國房地產經紀人協會皆呼籲，房貸利率會在未來四個季度繼續上漲。
This has caused some purchasers to lament the fact they may no longer be able to get a rate less than 4%. However, we must realize that current rates are still at historic lows.
Here is a chart showing the average mortgage interest rate over the last several decades.