Many people are wondering whether or not to purchase a home in 2011. For several reasons, right now is the time to buy.
The Benefits to Purchasing a Home Right Now
Mortgage rates are at an all time low! Mortgage rates have reached levels of 7% even 8% APR but they are currently 4.250% (4.433 APR) on a 30 year fixed loan. To calculate how much you can save if you decide to wait to purchase a home and risk having a high APR, or by purchasing now visit http://www.bankrate.com/calculators/mortgages/mortgage-calculator.aspx Not only are mortgage rates incredibly low, but supply and demand has a huge effect on the price of housing.
The Law of Supply and Demand
The 2011 Marketplace is perfect for home buyers due to the economic law of supply and demand. Homes that used to cost 1.2 million are now only 400,000. There are currently way more homes available for sale than their are purchasers. This is mainly due to all of the foreclosure’s that are happening and many families are living with relatives or combining housing or moving into rental properties. This leaves a vast amount of homes that are owned by banks and families that are desperately trying to sell their home. When the amount of sellers is higher than the amount of buyers, the price drops and vice versa. The 2011 market is currently experiencing more supply than there is demand.
The Market Won’t Plummet Twice
Some people are afraid that the housing market will plummet even further. Some critics argue that the housing market will experience further losses. These theories could be true to a certain extent, and the housing market could drop a little, but in the long-run house prices will go up. House prices will go up because the population in the U.S. is increasing, this means more families, and more families means more houses that are needed to house all of those people. This in turn creates more demand for housing, which will increase the prices of homes.
In conclusion, house prices are currently low and will steadily rise in the foreseeable future and mortgage rates are phenomenal. If you wait too long interest rates will start rising as the economy recovers, and you will end up paying thousands and thousands of extra cash on interest paid to the bank. Don’t hesitate, otherwise, it could be too late.