The reality is, mortgage rates are near historic lows and, combined with affordable home prices, right now is the perfect time to start talking with a real estate agent about seizing the opportunity of homeownership. So, rather than sitting on the fence, why not own it?
According to a recent survey from the National Association of Realtors, nearly eight out of 10 respondents believe buying a home today is a good financial decision. That's a good sign. Here are five key reasons why now is a good time to consider buying.
1. Homes are More Affordable -- Home prices remain more affordable than ever before in markets across the country. According to the Freddie Mac House Price Index, current housing prices are down 27% on average across the nation from peak values five years ago. Coldwell Banker Real Estate showcased affordability levels in its 2011 Home Listing Report, which ranked more than 2,300 markets.
2. Rates are Low -- Mortgage interest rates remain near historical lows, which can mean lower monthly payments and/or shorter lending terms. Coldwell Banker Real Estate recently launched an online First-Time Home Buyer Resource Center that features content and tools to help educate potential first-time home buyers. According to Bankrate.com, average fixed-rate mortgage now stand at just 4.33% for 30 years and 3.5% for 15 years.
3. Homeownership is Still the American Dream -- Lifestyle changes such as marriage, having children and starting a new job are some of the most common reasons that people decide to purchase a new home. But the American Dream of homeownership is much more than just a piece of property; it's a home. According to a recent Coldwell Banker survey of more than 300 consumers who purchased their home in the last year, 67% said the market afforded them the opportunity to buy a home sooner than expected and half said they found a home in a more desirable neighborhood than expected.
4. Financing is Available -- Though many people decide they want to purchase a new home based on lifestyle factors, the financial aspect of purchasing a home needs to be top-of-mind. A potential homebuyer should conduct the necessary research to prepare for the home buying process. Today's borrower needs to have stable employment of at least two years, sufficient income to cover the monthly mortgage payment and living expenses, adequate savings to make at least a 3.5% down payment, and, in general, a credit score of at least 620.
5. Timing is everything -- When preparing to purchase a home, take the time to research other factors that could affect the home buying process. For example, according to new loan limits published by FHFA and HUD, conforming loan limits will be reduced on October 1, which will decrease the availability and affordability of mortgage credit for many home buyers in 42 states.
"Timing is everything" is a saying used to describe just about anything, and it is especially true when it comes to home buying. We may never see conditions like this again, so it only makes sense that now is the time to at least consider purchasing a home. Visiting the "Home Buyers" tab on www.californiamoves.com is a good start. Learning as much as you can about the home-buying process will make you more comfortable when it's time to get off that fence.
A real estate veteran with more than two decades of experience, Rick Turley is the president of Coldwell Banker Residential Brokerage in the San Francisco Bay Area, including here in Pleasanton and the Tri-Valley.