An important message from our in house lender Mortgage Master…..
The Real Estate Waiting Game Is Over
If you’re like a lot of homebuyers, you’ve probably found a comfortable spot on the sidelines of the real estate market to simply sit and watch. Who can blame you? Over the past several years, home values have decline considerably, sales volume has turned down, and mortgage rates have dropped.
There’s just one problem: none of that is true anymore. Furthermore, if you wait too long, missing out on today’s real estate opportunities could be more costly than you realize.
While, at one time, waiting out the market seemed the wisest possible play to make, the waiting game is over, and the “opportunity of a lifetime” — once characterized by cheap money and cheap homes — is clearly starting to pull out of the station.
Consider these statistics:
- Home prices are creeping up. At the time of this writing, the median price for new homes sold in April hit $271,600, according to the Census Bureau. That’s higher than its 2006-2007 peak. April’s median home sales price for existing homes was $192,800, the National Association of Realtors reports, marking a 14-month run of consecutive year-over-year price gains. The last time that happened was from April 2005 to May 2006, at the height of the real estate boom.
- Inventory is getting scarce. The inventory of existing home sales for April was 13.6% below April 2012’s 6.6-month supply, with current, and now only comprises a 5.2-month supply. New homes are in a similar boat, with a 4.1-month supply of homes at April’s sales pace.
- Rates are showing signs of increasing. Over most of 2012 and the first half of 2013, the average rate on 30-year mortgages has been below the 4% mark, but that could be changing. In April, the average edged up on 4% with rates in the 3.91% to 3.98% territory, depending on the week and the lender. The last time mortgage rates were at 4% was March 2012.
But most importantly, it costs you money to wait — sometimes, lots of it. When the market starts appreciating, as it is starting to do, it is nearly impossible for your savings to keep pace with market gains.
Let’s take the median existing home as an example: If that home’s current $192,800 price tag increases by 5% over the next 12 months, its value will have gained $9,640 to hit $202,440. Will you be able to save $9,640 over a year, in addition to covering all your additional expenses? That’s a critical question you must ask yourself, because that amount of money could cut into your down payment or costs to close the loan.
Factor in an increase in mortgage rates and today’s deal could quickly elude you in just a few short months. If you are interested in purchasing a home, and don’t want today’s opportunities to escape you, now is the time to start running the numbers.
Call me today and I’d be happy to sit down with you to assess your current buying power and the financing options available to you!
Keep in mind I always offer FREE pre-approvals. If you are already working with another lender, reaching out for a second opinion is always a good idea.
* Mortgage Master is not a credit counseling or financial advisement firm and this information is for educational purposes only and is not to be taken as guidelines or guarantees to improve your credit or financial situation or eligibility to secure a home loan.
Christian G Babcock
Senior Loan Officer
Mortgage Master Inc. l 520 White Plains Road l Tarrytown, NY 10591
[o] 914.586.1108 [c] 914.447.9691 l [f] 914.206.9641 I NMLS ID: 181227
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