Take Advantage Of Your Purchasing Power...

Take Advantage of Your Purchasing Power

Last year is a record-breaker when it comes to housing affordability, according to the National Association of Realtors [NAR]. Interest rates and home prices dropped dramatically, offsetting lower median incomes, which are the three factors considered in determining the affordability index. But that's not expected to last; as interest rates creep up, and housing prices as well, we may not see an index this high for many years. Have you taken advantage of this perfect storm of factors to purchase a new property? Whether you are looking at buying a larger or smaller home, investing in real estate, or even purchasing a second or retirement home, it's a great time to make your move, before the market changes and your purchasing power begins to drop. Home Prices Today's housing prices are astonishingly low. According to real estate website Trulia, buying a home in 2012 was even cheaper than renting in the largest U.S. cities. Prices did make modest gains over the course of the year, however, and though they remain very favorable, experts predict they will continue to slowly rise as the market improves. By acting now you can take advantage of prices that are still extremely low, maximizing your purchasing power. Interest Rates Not only are housing prices at historic lows, but interest rates have been, too. Rates for 30-year fixed loans have been in the 3-4% over the last several months. This is significantly lower than the historic average. The average rate for 30-year fixed rate loans over the last four decades has been 8.9 percent. With rates this low, the smart buyer makes a move. The market can't sustain these numbers for long, and won't need to as it improves. Economists from the New York Federal Reserve have already stated that they don't expect mortgage rates to sink much lower than they have already. Affordability and Purchasing Power The affordability of housing during the first quarter of 2012 hit its highest level in the 20 years that the National Association of Home Builders and Wells Fargo have been tracking it in their joint Housing Opportunity Index (HOI). The combination of low rates and low housing prices has created an unprecedented opportunity for homebuyers to maximize their purchasing power. But the HOI did begin to drop over the course of 2012. Do you want to risk it lowering even more in 2013? Every partial percentage point that rates rise will significantly lower your purchasing power. If you'd like to see some surprising numbers, let's set up a no-obligation meeting so I can show you the difference in purchasing power — and monthly payments — between 3.5% and 4%. You may find the motivation to begin the homebuying process right away! Capitalize on the Current Market Buying a home just isn't going to get much cheaper. You know your purchasing power is at its peak; delaying for even a few months can reduce the amount of home you can afford and raise the price you'll pay. If you are ready to capitalize on the current market's perfect storm of low rates plus low home prices, please contact me to set up a meeting to look at your options, review costs, and ensure you're maximizing your purchasing power.   Jennifer Odom Mortgage Loan Consultant Contact Me My website