Low rates are like a rocket: Once they take off, they’re never coming back. In that case, you’d better jump on board while you still have the chance.
I’ve said from the start that 2013 would be a great year to buy a home. (See 13 Reasons to Buy a Home in 2013.) But the fact is, with rates and home prices rising, the end of the year might not be quite as awesome for home buyers as the beginning was. And you can rest assured that homes aren’t going to get any more affordable next year. So when’s the best time to snag your dream home for your dream price with your dream mortgage rate?
Right this minute!
According to a Realtor Mag article, a lot of homebuyers “are realizing now they may have missed the boat.” Many buyers are riding the wave of the market, waiting for rates and prices to reach the floor, but unfortunately we’ve already gone as deep as we’re going to go. You don’t want to wait for rates to float back to the surface before you buy; rates and home prices have bottomed out, and the only way they’ll go from here is up.
If you’ve been paying attention to the Zing Market Update, you already know that rates are ticking back up. Two weeks ago, 30-year fixed mortgage rates averaged 3.93%. In the most recent weekly report (ending in June 27), 30-year fixed mortgage rates averaged a whopping 4.46%, according to Freddie Mac’s Primary Mortgage Market Survey. 4.46% is higher than rates have been in the past several months, but if you buy now, you’ll still have a rate that’s much lower than it’s been in years past.
So we know that rates are rising, but what are home prices doing? According to the S&P/Case-Shiller Home Price Indices, home prices are climbing faster than a monkey in a banana tree (I might have rephrased a bit). From April 2012 to April 2013, home prices rose approximately 12%. To state the obvious, 12% is a lot. Think about it this way: In most markets, a house worth $200,000 a year ago would cost $224,000 now. Big difference? You bet.
I’m not throwing all these facts and figures out there to make you think that buying in the current market is a bad idea; I’m telling you the exact opposite. You should know that the most advantageous time to buy is now. If you’re ready to buy a home, you should do so ASAP. We’ve reached the bottom of the bottom, and rates and home prices aren’t going to plummet again anytime soon. Get preapproved, call a realtor and buy your home before the low rates rocket takes off – because it won’t be returning to Earth for a long, long time.
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